The regime's relations with the U.S. worsened during 1963, as well as heightening discontent among South Vietnam's Buddhist majority.
In May, in the central city of
Huế, where Diệm's elder brother was the archbishop, Buddhists were prohibited from displaying Buddhist flags during
Vesak celebrations commemorating the birth of
Gautama Buddha when the government cited a regulation prohibiting the display of non-government flags. A few days later, Catholics were allowed to fly religious flags at another celebration where the regulation was not enforced. This led to a protest lead by
Thich Tri Quang against the government, which was suppressed by Diệm's forces, killing nine unarmed civilians. Diệm and his supporters blamed the
Vietcong for the deaths and claimed that the protesters were responsible for the violence. Although the provincial chief expressed sorrow for the killings and offered to compensate the victims' families, they resolutely denied that government forces were responsible for the killings and blamed the Vietcong.
The Buddhists pushed for a five point agreement: freedom to fly religious flags, an end to arbitrary arrests, compensation for the Hue victims, punishment for the officials responsible and religious equality. Diệm labeled the Buddhists as "damn fools" for demanding something that, according to him, they already enjoyed.
Diệm banned demonstrations, and ordered his forces to arrest those who engaged in civil disobedience. On June 3, 1500 protesters attempted to march towards Tu Dam Pagoda. Six waves of ARVN tear gas and attack dogs failed to disperse the crowds, and finally brownish-red liquid chemicals were doused on praying protesters, resulting in 67 being hospitalised for chemical injuries. A curfew was subsequently enacted.
The turning point came in June when a Buddhist monk,
Thích Quảng Đức, set himself on fire in the middle of a busy Saigon intersection in protest of Diệm's policies; photos of this event were disseminated around the world, and for many people these pictures came to represent the failure of Diệm's government. A number of other monks publicly
self-immolated themselves, and the U.S. grew increasingly frustrated with the unpopular leader's public image in both Vietnam and the United States. Diệm used his conventional anti-communist argument, identifying the dissenters as communists.
As demonstrations against his government continued throughout the summer, the special forces loyal to Diệm's brother Nhu conducted an August raid of the
Xa Loi Pagoda in Saigon. The Pagodas were vandalised, monks beaten, the cremated remains of Thích Quảng Đức, which included a heart which did not disintegrate, were confiscated. Simultaneous raids were carried out across the country, with the
Tu Dam Pagoda in Hue being looted, the statue of
Gautama Buddha demolished and a body of a deceased monk confiscated. When the populace came to the defense of the monks, the resulting clashes saw 30 civilians killed and 200 wounded. In all 1400 monks were arrested, and some thirty were injured across the country. The U.S. indicated their disapproval of Diệm's administration when their ambassador
Henry Cabot Lodge visited the Pagoda
ex post facto. No further mass Buddhist protests occurred during the remainder of Diệm's rule.
During this time, Madame Nhu, who was the
de facto first lady due to Diệm's bachelor life, inflamed the situation by mockingly applauding the suicides, referring to them as "barbecues" while Nhu stated "If the Buddhists want to have another barbecue, I will be glad to supply the gasoline."
The pagoda raids stoked widespread public disquiet in the previously apolitical Saigon public. Students at
Saigon University boycotted classes and rioted, which was met by arrests, imprisonment and the closure of the university; this was repeated at Hue's University. When high school students demonstrated, Diệm arrested them as well; over 1000 students from Saigon's leading high school, most of them children of Saigon public servants, were sent to re—education camps. Children as young as five were also sent to these camps on charges of anti-government graffiti.
Diệm's foreign minister
Vu Van Mau resigned, shaving his head like a Buddhist monk in protest. When he attempted to leave the country on a religious pilgrimage, Diệm had him jailed.