Two killed in Nepal blast as PM vote nears

Two people were killed and at least a dozen wounded when an explosion ripped through a church near the Nepali capital today, police said, hours before the country's parliament was set to elect a new prime minister.

The blast hit the Dhobighat suburb in Lalitpur, an adjoining town 3 miles south of Kathmandu.

"The wounded people have been rushed to a local hospital and we are investigating," superintendent of police Kedarman Singh Bhandari said. Police cordoned off the area, which was strewn with shattered window panes.

There was no claim of responsibility but a little-known Hindu group, the Nepal Defence Army, threw pamphlets around the site demanding Nepal be declared a Hindu state. Nepal became a secular state three years ago after a decade-long civil war ended.

Nepal's parliament was due to choose a new prime minister later today after Maoist leader Prachanda resigned amid a row over his plan to fire his army chief.

Former Maoist rebel leader Pushpa Kamal Dahal, who still uses his nom de guerre Prachanda, meaning "fierce", resigned on May 4 after President Ram Baran Yadav stopped him from firing General Rookmangud Katawal.

Prachanda accused Katawal of undermining the civilian government.

A loose alliance of 23 political parties is backing moderate communist Madhav Kumar Nepal for the job. Party officials said his election was a mere formality because the coalition controlled nearly 360 members in the 601-seat parliament.

He is from the moderate Communist UML party, second biggest group in the alliance, and is known for his ability to negotiate with rivals.

"He may be elected unopposed. And even if there is a vote he is certain to win," senior UML leader Shankar Pokharel told Reuters.

Nepal, home to eight of the world's 14 highest mountains including Mount Everest and the birthplace of Lord Buddha, is facing a difficult year of crippling power shortages, soaring inflation, unemployment, food shortages and poor public security.

Business executives say political turmoil could hit industrial output and tourism, a key source of income that was beginning to rebound on peace hopes.

Landlocked Nepal has had 18 prime ministers in the past 19 years. Analysts said the new leader faced a crucial test of his abilities to keep together allies who harbour deep mutual mistrust and old enmities.

"Co-existence is not easy," a banner headline in the daily Nayapatrika newspaper said, referring to the fragile alliance.

The new government has just one year to oversee the drafting of a new constitution, a key part of the peace deal that brought to an end the civil war against the Maoists, an insurgency in which more than 13,000 people were killed.

It must also rehabilitate more than 19,000 former Maoist fighters housed in 28 UN-monitored camps, crucial to the stability of a nation tucked in the Himalayas between giants China and India.

Active support of the Maoists, who have vowed to continue "fighting" for Katawal's ouster, is key to the success of both jobs.