For King Gyanendra, who sacked the government and took executive power one year ago, Wednesday's polls are an attempt to signal that he is serious about restoring democracy and is laying the ground for parliamentary elections by April 2007.

But the seven mainstream political parties in the impoverished Himalayan kingdom and Maoist rebels, fighting since 1996 to topple the monarchy, see it as a move by the king to legitimise his rule and sideline popular democratic groups.

"The seven-party alliance represents about 90-95 percent of the old parliament," said a Kathm-andu-based diplomat. "Their boycotting the municipal polls puts a very big question mark over whether these elections will be free, fair and credible."

The rebels have stepped up violence ahead of the vote, killing two election hopefuls, shooting and wounding another and setting off bombs in the houses and vehicles of candidates.

One policeman was killed and four wounded on Monday when their vehicle hit a landmine near Mahendranagar in western Nepal, police said.

Security was stepped up in Kathmandu after soldiers late on Sunday defused a bomb, apparently left by Maoists, under a bridge in an upmarket area, authorities said.

The violence came as a week-long nationwide general strike called by the rebels entered its second day. The stoppage has closed down transport services, businesses and educational institutions and brought life to a halt across the country.

Fear of being targeted by the rebels has hurt participation in the polls.

Of more than 4,100 posts at issue in 58 municipal councils, there are no candidates for more than 2,100. Nearly 650 candidates pulled out after filing their papers and dozens have resigned after being elected unopposed.