Hundreds of people gathered to celebrate early Tuesday outside the home of Girija Prasad Koirala - the opposition leader named as Nepal's new prime minister.
He was named after King Gyanendra announced late Monday he would reinstate parliament - as demanded by a coalition of opposition parties, whose supporters had staged nearly three weeks of anti-government protests.
Some, like youth leader Gaghan Thapa, say protesters will still push for an end to the monarchy, because, he says, King Gyanendra cannot be trusted.
"We will wait for the day when he can sack the people's government and again absorb the political power," said Thapa.
The king's concession defused a tense standoff marked by violent protests and a nationwide general strike.
Parliament is expected to meet Friday. Leaders of Nepal's communist insurgency have rejected the concession as a ploy by the king to hang on to power.