A number of companies in Nepal's capital are considered likely to close in line with demands by Maoist rebels who have threatened to blockade the city. The Maoists are already being blamed for the bombing Monday of a luxury hotel.

The Nepalese government has put security forces on alert a day before a threatened blockade of the capital, Kathmandu. The Maoist rebels who made the threat have also demanded that at least 10 major companies shut down before Wednesday.

The government has promised to protect the companies, but Yuvraj Ghimre, the editor of the weekly news magazine Samay says the promise will inspire little confidence.

"It seems that the industries are more dictated by fear of the Maoist activities than the assurance given by the government," he said.

The Soaltee Crowne Plaza luxury hotel has already been shut after suspected guerrillas threw four small bombs onto its tennis courts late Monday. No one was injured in the attack, but tourists staying there were moved to other hotels in the city.

The rebels have threatened to blockade Kathmandu on Wednesday to prevent food and other material from reaching the city, unless the government releases jailed rebels and pays compensation for guerrillas killed in previous fighting. The government has rejected the demands.

Mr. Ghimre says the rebels have intensified their campaign against the government simply because they can, and it is clear that they have a psychological advantage.

"Not that they have won the war or they have been able to kill large number of security forces. But the upper hand in the sense that the impact of their activities is being felt everywhere, including the capital," he said.

Nepal's Communist Party says it models itself movement on the teachings of the late Chinese leader Mao Zedong. The rebels have been battling government forces since 1996 in a bid to end the constitutional monarchy, but civilians have also been swept up in the conflict, and roughly 10,000 people have been killed.

Peace talks between the government and the rebels fell apart a year ago.