American Marconi Wireless News - Journalist, protester killed at Nepal pro-monarchy rally

Police said officers fired rubber bullets and live rounds into the air, after using tear gas and water cannons against the crowds.

Some demonstrators pelted stones at police, an AFP photographer saw.

"A protester has died of a gunshot wound," police spokesman Dinesh Kumar Acharya told AFP.

Acharya said that a journalist died after protesters set the building he was filming from on fire.

Thousands of demonstrators had gathered on Friday morning close to parliament, chanting that the king and country were "dearer to us than life".

Support for the restoration of the monarchy and re-enshrining Hinduism as the state religion has grown in tandem with popular dissatisfaction over political instability, corruption and lacklustre economic development.

During the rally several buildings and vehicles were vandalised, according to the Kathmandu Valley police station.

"Four police officers are also seriously wounded and are being treated," said station spokesman Shekhar Khanal.

Twenty-three demonstrators were wounded and 17 were arrested, he said, while authorities imposed a curfew in the area.

- 'Things have only deteriorated' -

The Himalayan nation adopted a federal and republican political system in 2008 after parliament abolished the monarchy, as part of a peace deal that ended a decade-long civil war responsible for more than 16,000 deaths.

Before violence at the rally, protester Mina Subedi said "things have only deteriorated" in recent years.

"The country should have developed significantly. People should have had better job opportunities, peace and security and good governance. We should have been corruption-free," the 55-year-old told AFP.

Opposition parties had meanwhile marshalled thousands more people at a counter-demonstration elsewhere in the capital to "safeguard the republican system".

"Nepalis will not return to the past," said Pushpa Kamal Dahal, a former guerrilla chief who led the decade-long Maoist insurgency before entering politics and has since served as prime minister three times.

"Maybe they have dared to raise their heads because us republic supporters have not been able to deliver as per the wishes and wants of the people."

Abdicated king Gyanendra Shah, 77, had largely refrained from commenting on Nepal's fractious politics, but recently made several public appearances with supporters.

Shah was crowned in 2001 after his elder brother king Birendra Bir Bikram Shah and his family were killed in a palace massacre that wiped out most of the royal family.

His coronation took place as the Maoist insurgency was raging in far-flung corners of Nepal.

Shah suspended the constitution and dissolved parliament in 2005, triggering a democratic uprising in which the Maoists sided with Nepal's political establishment to orchestrate huge street protests.

That eventually precipitated the end of the conflict, with parliament voting in 2008 to abolish Nepal's 240-year-old Hindu monarchy.

Ch.Kahalev--AMWN