Defying curfew and shoot-at-sight orders, hundreds of pro-democracy activists took to the streets for the second day on Friday, raising slogans against King Gyanendra amid speculation that he may soon offer a reconciliation pact to defuse the political crisis.

The protestors converged on Kathmandu roads in large numbers responding to the call by the seven-party political alliance to hold fresh protests and march to the Narayanhiti Royal Palace.

The royal government extended the curfew, which it had imposed on Thursday, to prevent activists from holding demonstrations, triggering clashes in which five people were killed and over 100 injured.

The government announced that the curfew has been extended till 8 pm in the evening and asked the people in Kathmandu, the suburbs of Lalitpur and Bhaktapur and in the resort town of Pokhara, to observe it strictly.

It warned that those who violate the orders will be shot. It said the curfews were being imposed 'to protect the people, property and peace'. 

Speculation is rife that the monarch will make some announcement on national television soon to defuse the situation. Prime Minister Manmohan Singh's [Images] special envoy Karan Singh, after his meeting with the King on Thursday, had said that the monarch may make an announcement shortly that would help defuse the situation.

Patrolling in the capital city was intensified as security personnel advised people over loud speakers to stay indoors. 

Stepping up their offensive against the King, leaders of the seven-party alliance today said "token" moves by the monarch  would nor serve any purpose and pressed their demand for handing over sovereign power to the people. Nepali Congress  leader Ram Chandra Poudyal said "given the way the movement has snowballed both in agenda and dimension, there is no  way we can make do with token steps.

Election to the Constituent Assembly is a must." Describing the present situation in  Nepal as "very serious" and "fast deteriorating", Poudyal accused the King of deliberately delaying initiating steps to resolve  the crisis. Any offer of establishing an interim government will be outright rejected, he told PTI. "The Seven Party Alliance will  not accept any light proposal.

The constituent assembly election has to be held and the problem of Maoists addressed to diffuse the current crisis," he added. Another Nepali Congress leader Sekhar Koirala said, "time is running out for the King. 

The aspiration of the people is very high and he will have to act fast."

Speaking on a similar vein, CPN-UML senior politburo  member and former Finance Minister Bharat Mohan Adhikari said, announcement of an interim government will neither  satisfy the common people nor the seven-party alliance. The King has to accept the roadmap spelt out by the seven-party alliance.

Holding of Constituent Assembly Elections is the only way out to resolve the present imbroglio. It will bring inclusive democracy and solve the Maoist problem restoring peace in Nepal, he said.

When contacted, American embassy spokesman Robert L Hugins told PTI, "The situation is fluid."

He said "We have been urging security forces to exercise restraint" in the light of five killed yesterday. "We are also watching events as they unfold."