The Nepalese capital, Kathmandu, has been virtually cut off from the rest of the country after Maoists warned drivers to stay off the roads.
Troops on patrol near the capital
The rebels have warned of "dire consequences" if car and lorry drivers ignore the threat.
In the south-west, meanwhile, at least 10 people are reported dead in a clash between rebels and security forces.
The deepening crisis came as the king postponed a visit to Delhi, after the death of ex-Indian PM PV Narasimha Rao.
The Maoist insurgency had been expected to dominate the agenda during King Gyanendra's 11-day India visit which should have begun on Thursday.
Hundreds of vehicles are stranded on main roads around Kathmandu as drivers refuse to enter areas affected by the ban.
The BBC's Sushil Sharma in Kathmandu says the rebel move is an attempt to demonstrate their strength.
A similar restriction was imposed for a week in August, leading to shortages of goods in Kathmandu and rising prices.
As before, the rebels are enforcing the blockade through fear of reprisals rather than by any physical presence or roadblocks.
They say their action is in protest at abuses by security forces.
However, on Wednesday the rebels burned 18 trucks in Hetauda, a town 50km (30 miles) south-west of Kathmandu.
Delhi has been watching the nine-year conflict over the border with increasing concern as it has intensified in recent years.
India has helped train the Nepalese army, but has ruled out carrying out joint operations against the rebels.
The Nepalese government has set a deadline of 13 January for the Maoists to come to the negotiating table.
Peace talks failed last year, since when violence has risen.
Recent weeks have seen some of the bloodiest clashes between rebels and security forces for months.
Reports on Thursday said an overnight clash in Bardia district near the Indian border had left at least 10 people dead.
The authorities confirmed that five security force members had been killed in the clash with the rebels.
Eyewitnesses said five civilians, among them children, died in the cross-fire.
More than 10,000 people have died in Nepal's conflict since the Maoists began their fight to replace the monarchy with a communist republic.