The demonstrators were protesting over the lack of political reform, and calling for the repatriation of tens of thousands of Bhutanese from Nepal.

The leaders of the country's National Movement for Democracy said the protest had continued at a gate separating Phuntsholing from a town on the Indian side of the border.

Refugees try to return

Last week, police in the Indian state of West Bengal arrested 261 refugees who were trying to march back into Phuntsholing from their camps in eastern Nepal.

A spokesman for the Bhutanese pro-democracy group said Wednesday's protest involved nearly 300 people inside the town of Phuntsholing.

He said that another 50-60 Bhutanese refugees, who had evaded an Indian police dragnet last week, had tried to sneak back into the town from the Indian side of the border.

The Bhutanese police superintendent at Phuntsholing, Sonam Thendhup, told the BBC his men had pushed back the refugees. However, it was not clear whether the Bhutanese police had made any arrests.

The BBC Calcutta Correspondent Subir Bhaumik says this was perhaps the first demonstration on Bhutanese soil in the last eight years.

Calling for reform

Bhutan has recently introduced political reforms to ensure what it describes as a more participatory form of government.

But pro-democracy groups have said these changes are largely cosmetic. They say the minority continues to retain the real social power in the Himalayan kingdom.

Bhutan is an absolute monarchy with no written constitution.

Activists are calling for a parliamentary form of government with a constitutional monarchy.

They also want Bhutan to take back the thousands of refugees, mostly of Nepali origin, who left Bhutan earlier in the decade complaining of ethnic persecution.

Bhutan says the real number of the refugees is less than one-third the number claimed by their leaders.

In December last year, Bhutan's pro-democracy groups decided to unite.

Stepping up the campaign

Rongthong Kinley Torji, who led one of the groups, the Druk National Congress, was given the leadership of the unified movement for democracy.

He says it has been decided to organise demonstrations inside Bhutan, and at the same time lead the tens of thousands of Bhutanese refugees now in Nepal back to Bhutan.

Bilateral dialogues between Bhutan and Nepal to find a solution to the refugee problem have failed, and India has refused to accept the request of refugee leaders to mediate.