"Despite the provocative attitude of the government forces, our party has decided to extend the ceasefire by one month, taking into account the demands of the national and international communities for democracy," said rebel leader Prachanda in a statement sent to AFP.

A three-month unilateral ceasefire called by the Maoists, who have been fighting for a communist republic since 1996, was due to end on Friday.

Security forces were bracing for a major democracy protest planned by leftists in Kathmandu later Friday.

"We believe this decision will pave the way to strengthen the movement of democracy and peace against the autocratic rule and give new direction to find a political way out," Prachanda said.

There have been isolated clashes between the Maoists and the Royal Nepalese Army (RNA) during the ceasefire which the Maoist leader blamed on the army.

"The security forces tried hard to break the ceasefire," Prachanda said.

Human rights activists welcomed the Maoists' decision to prolong their ceasefire.

"By extending the ceasefire, the rebels have shown that they are committed to the 12-point agreement they reached with the political parties of Nepal last month," said Subodh Pyakurel, a human rights activist.

"The present regime is very alarmed with the understanding between the rebels and the political parties, so it could take drastic steps," he said.

On Thursday, UN human rights chief Louise Arbour warned that Nepal faced the threat of a full-scale armed conflict, and called on authorities to join a ceasefire with Maoist rebels and allow free assembly.

"A mutual ceasefire between the Communist Party of Nepal (Maoist) and the government of King Gyanendra, and steps towards lasting peace, are crucial to bring to an end a period of grave violations of human rights and international humanitarian law by both the Maoists and the State," Arbour said.

"I am seriously concerned about the very real possibility that full-scale armed conflict could resume," she said.

The king was to return to Kathmandu Friday following visits to Bangladesh and several African nations, where he visited Nepalese UN peacekeepers.

A month of protests are planned to begin with the king's return. Authorities barred meetings in certain areas of the capital, but opposition leaders vowed to go ahead despite the ban.

The Maoists and seven mainstream opposition parties agreed last month to form an anti-royal alliance to restore democracy in the troubled Himalayan kingdom.

They set out a 12-point plan and called for an end to fighting and for elections to be held under UN auspices.

Under the agreement, the Maoists would lay down their arms under UN or other international supervision while a new constitution was drafted.

Analysts warn that the alliance between the opposition parties and the Maoists will isolate the increasingly unpopular king.

Nepal has been shaken by repeated strikes and protests since the king assumed total control, a move he justified by saying the government had failed to quell the Maoist revolt.

The violence and the royal takeover has brought international condemnation for both sides as well as reviews of military and humanitarian aid from several countries, including the United States, Britain and India.

The Maoist conflict has killed more than 12,000 people.