Nepal's King has appointed a new cabinet, one day after firing the government and imposing a state of emergency. Anjana Pasricha in New Delhi reports on the situation in the tiny Himalayan country, with which communication links remain largely cut.

Nepalese radio and television announced Wednesday that King Gyanendra will head a 10-member cabinet. A palace statement said the king is confident that everyone would support and cooperate with the new administration, which is composed of staunch royalists.

Tuesday, the king dismissed Prime Minister Sher Bahadur Deuba and his ministers for their failure to hold elections or end a communist insurgency.

The king denied he had staged a coup, but civil liberties such as freedom of speech and expression have been suspended under the state of emergency. The dismissed ministers have been placed under house arrest. The Nepali Congress Party says dozens of political leaders have been arrested and many have gone underground.

Troops armed with automatic weapons are patrolling the streets of the capital, Kathmandu, for the second day. The city is reported to be calm, shops are open, and residents are going about their usual business.

Communication links have been disrupted since the King's announcement, virtually isolating the tiny country. Phone and Internet lines are cut, although some flights in and out of Nepal have resumed.

Independent political analyst Prem Shankar Jha in New Delhi says the King has turned the political parties against him, just when he needs their cooperation to end a bloody Maoist rebellion that has wracked the country since 1996.

"What he has done is going to make things worse," he said. "He has now put himself directly in confrontation with the Maoists, who have of course been saying Nepal must not have a monarchy, and in this they [the rebels] are going to be able to rally a lot of the middle class and a lot of the disgruntled politicians."

The new government struck a conciliatory note. Speaking on state radio, new Home Minister Dan Bahadur Shahi said the government would ask the rebels to enter peace negotiations.

But in an earlier statement, Maoist leader Prachanda said the guerrillas were prepared to cooperate with other political forces to end the monarchy. He said the King had pushed Nepalese society back to the 15th Century, and called him a "national betrayer."

The dismissed prime minister has also criticized the king's moves, saying they violate the constitution and are anti-democratic.

Political stability has eluded Nepal since it became a multiparty democracy in 1990. Weak coalition governments have been accused of corruption, and have collapsed frequently. Bickering political parties have been unable to unite to end the Maoist rebellion.

Meanwhile, a South Asian summit scheduled to be held in Bangladesh on February 6 and 7 was postponed after India said it would not attend the meeting due to "recent developments in the neighborhood" - an obvious reference to the situation in Nepal.

Observers say New Delhi's decision was partly prompted by its reluctance to give legitimacy to the rule of King Gyanendra, who was due to attend the summit, by sharing a platform with him. India has strongly criticized the king's actions.