At least three people were shot dead and dozens more injured as Nepalese police opened fire on anti-monarchy protesters who defied a shoot-on-sight curfew to march on the capital Kathmandu.

Witnesses described how live ammunition, rubber bullets and tear gas were fired into the ranks of 30,000 flag-waving activists as they breached the city-wide exclusion zone from several directions.

Doctors in the capital had earlier expressed fears that the showdown could turn into a massacre: a dozen casualties were said to be critically ill. The strict 18-hour curfew, which came into force at 2am local time, led to a shortage of paramedics and doctors at the city's hospitals.

"Three of at least 40 injured protesters brought into the hospital have died," said Dr Deepak Regmi from Kathmandu’s Model Hospital. "Most of the injured had bullet wounds. About 12 are in a serious condition."

"We are struggling to treat so many people. Because of the curfew we do not have many doctors. More injured are coming in but they are having to lie on the floor."

Some 35 people were injured in the northern suburb of Gongabu when police beat back a huge crowd with bamboo sticks, an AFP reporter said.

At Kalanki, a western suburb, police fired automatic rifles towards the massed protesters, a photographer said. Witnesses said a woman and child appeared to be among the dead. At least three men had been beaten unconscious.

There were also violent confrontations at Chabahil to the northeast, where an estimated 10,000 people rallied to join the demands for the restoration of democracy, chanting "King Gyanandra must go!"

Today's demonstration followed two weeks of protests, strikes and civil unrest aimed at ending King Gyanendra's self-imposed dictatorship and restoring democracy in the Himalayan kingdom.

The 18-hour curfew backed with lethal force was imposed as the protests escalated in violence. Today, only tourists catching departing planes were allowed to leave their hotels. Shops and markets were closed and the centre was deserted apart from soldiers on foot patrol.

Kathmandu’s chief administrator Shushil Ghimire said that the curfew had been ordered because Maoist rebels have infiltrated the ranks of the seven peaceful pro-democracy groups. He said that explosives and weapons had been found at the homes of rally organisers.

King Gyanendra grabbed absolute power in February 2005, blaming his politicians for failing to tackle the Maoist insurgency and to hold elections.

As the internal demonstrations continued, Nepal's republican neighbour India also added to the pressure.

Karan Singh, India's special envoy, was given military escort to Narayanhity Palace, the King's city residence, to deliver a letter demanding the restoration of democracy. They met for two hours and were photographed shaking hands, although Mr Singh cancelled a scheduled night's stop-over and returned to Delhi.

"Now the ball is squarely in the court of the King. I am hopeful that very shortly some sort of announcement will be made by him which will help considerably defuse the situation," he told reporters on his return.

As evening fell, organisers began preparations for another rally tomorrow. "We appeal to all people to participate in the massive demonstration on Ring Road on Friday at 12 noon," a statement said, warning that the royal government might enforce another curfew.

"Our movement is successfully moving forward despite the state’s excessive use of force during demonstrations nationwide."

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