The Nepali government is making plans to halt an anti-monarchy strike due to be held in the capital later this week. Maoist rebels, however, have declared a partial cease-fire in a bid to support the protest.
The four-day strike called by an opposition alliance to pressure King Gyanendra to give up power is set to begin Thursday, but small demonstrations are already being staged in the streets of Kathmandu.
Police fired tear gas and detained at least 20 students as they shouted anti-monarchy slogans in the capital.
The seven political parties in the alliance say they fear a government crackdown during their planned nationwide strike, which includes a mass rally.
The country's Maoist rebels have entered into a loose anti-royal alliance with the opposition parties. The rebels are supporting the strike by declaring a unilateral ceasefire in Kathmandu and surrounding areas, in order to create what they call "an easy atmosphere for the people to participate in the peaceful protest movement."
The parties have welcomed the truce, but urged the Maoists to extend it throughout the country.
Yuvraj Ghimre, editor of the Samay magazine in Kathmandu, says the people have welcomed the rebel cease-fire offer. He says the movement by political parties to restore multi-party democracy has wide public support.
"The general public, although they were very critical of the political parties, they are equally unhappy with the total failure of the royal regime, especially on the issue of corruption, the bad economic scenario in the country," he said. "There is a growing sense of frustration."
Political analysts say the opposition parties and the King appear to be heading for a major showdown.
The royalist administration has vowed to halt the strike and says it is not convinced by the rebel truce. A spokesman says the government has credible information that the Maoists plan to infiltrate demonstrations and incite violence. The government has stepped up security, and a night-time curfew has been imposed to restrict traffic into the city.
King Gyanendra has repeatedly crushed anti-royal protests since he took direct control of the government more than a year ago, and has failed to respond to repeated calls by the international community to reconcile with the political parties.
He defended his power grab by saying the politicians had failed to end the violent insurgency, which is aimed at turning Nepal into a communist republic. But analysts say the turmoil has only deepened since the king took power.