Maoist rebels in Nepal have extended a unilateral ceasefire by one month, just hours before King Gyanendra returned home after a three-week overseas visit.
The rebels blame the government for continuing their offensive
Rebel leader Prachanda said the move was part of a peace effort. There has been no response from the government.
In a related development, the Nepalese capital, Kathmandu, witnessed the largest public demonstration since King Gyanendra seized power in February.
The protestors demanded that the king restore democracy in the country.
The ceasefire announcement came ahead of the king's return from a visit to Bangladesh and several African countries.
In a statement e-mailed to the media, Prachanda said the ceasefire, which was due to expire on Friday, had been extended in response to calls from what he called positive national and international forces.
"After considering the plea from those in favour of peace and a stable political situation in the country, we decided to extend the cease-fire by one month," he said.
"Our party believes that this decision will help boost the movement against the autocratic regime and speed up the process for peace."
Major mainstream parties, civil society groups and key international donors such as neighbouring India, the US, and the European Union had urged the rebels to extend the truce.
UN Secretary General Kofi Annan also made such a call.
The rebels also urged the government to reciprocate, to clear the way for a negotiated settlement of the conflict.
King Gyanendra - under pressure to join the ceasefire
Prachanda has accused the royalist government of provoking the rebels into breaking the truce, by continuing military offensives.
He warned that a further extension would not be possible if the government continued with its present posture.
The extension of the ceasefire comes a day after an UN warning that armed conflict could resume in Nepal if the government did not join the rebel truce.
Tens on thousands of people staged demonstrations in Kathmandu on Friday shouting slogans against the king.
Estimates of the number of protesters varied from 25,000 to 40,000, making it the largest demonstration in the country since King Gyanendra seized power.
Recently, the rebels and a coalition of seven opposition parties agreed on a programme designed to end direct rule by King Gyanendra and restore democracy.
The government has refused to reciprocate the ceasefire saying the rebels are using this time to rearm and regroup.
The monarchy in Nepal lost much of its popularity after the king's seizure of direct power.
About 12,000 people have died in Nepal's 10-year-old insurgency.
The Maoists have been fighting for the abolition of the monarchy and the creation of a communist republic.