Operate normally

"The government has imposed no prohibition on the operation of educational institutions, businesses, factories, industries, transport services and the like at present where a state of emergency has been ordered," said a statement on state radio.

Maoist rebels have threatened to bring the country to a halt unless Gyanendra reverses his power grab. Mainstream political parties have called separately for a popular movement to restore democracy.

The government said it would take action against any opposition party or against the Maoist rebels if they call strikes aimed at disrupting life.

"The emergency was ordered in the interests of the public to consolidate the state of law and order in the country," the radio said.

Gyanendra last Tuesday fired the government of prime minister Sher Bahadur Deuba for failing to organise elections or to quell a Maoist insurgency aimed at toppling the monarchy and installing a communist republic.

He named a loyalist cabinet under his chairmanship, declared a state of emergency and pledged to restore multi-party democracy in three years.

The insurgency has claimed more than 11,000 lives since 1996.

In December Maoist rebels enforced a week-long transport blockade that virtually cut off routes into the capital for a week, severely disrupting food and fuel supplies to the Kathmandu valley.

All public phone lines, mobile services and the Internet have been cut since last week in a bid by the king to stifle dissent and prevent protests.

Scores of politicians and others have been detained and the media is operating under strict censorship.

A spokesman for the Nepali Congress party quoted by the British Broadcasting Corporration said 500 people have bene detained. The Nepalese Journalist's Association said its general secretary, Bishnu Nisthuri, was among those arrested.

The takeover has stirred international condemnation from rights groups and foreign governments including neighbouring India.