A three-day general strike called by Maoist rebels has shut down much of Nepal. The rebels have stepped up their eight-year campaign to replace Nepal's constitutional monarchy with a communist republic.

Hours before the strike began, four bombs exploded in the city council office and a private factory in the capital, Kathmandu. They caused no damage, but helped ensure that the shutdown ordered by the Maoist rebels was a success.

Businesses, markets and schools closed in the capital, and private transport avoided the roads in Kathmandu and other major towns.

Strike calls by Maoist rebels in Nepal are usually strictly obeyed for fear of brutal retaliation.

The latest shutdown is to continue until Thursday. It is the seventh strike called by the rebels in the past two months.

The frequent closures have raised concern of increasing damage to Nepal's fragile economy. Businesses estimate that a one-day strike costs the country around $14 million in lost revenue.

The Maoist rebellion erupted in 1996 to establish a communist republic in Nepal, and has claimed 9,000 lives.

Dwarika Nath Dhungel, a director of the Institute for Integrated Development Studies in Kathmandu, says business owners are not the only ones affected by the strike. He says the rebellion is hitting the countryside hard, as large areas are now under the control of Maoists.

"Development activities have almost come to a halt and there is no presence of the government in the far-flung areas of the country," he said. "It would not be too much of an exaggeration to say that the government exists in the urban areas and the district headquarters."

The strike did not deter Nepal's major political parties from holding a rally in Kathmandu for the fifth straight day. They are pushing King Gyanendra to reinstate the parliament and appoint a multi-party government.

King Gyanendra fired an elected government in October 2002 and replaced it with a pro-monarchy administration.

The political parties have vowed to carry on the daily protests till their demands are met. The king accuses the pro-democracy opposition of playing into the hands of the rebels.