Nov. 12 (Bloomberg) -- Thousands of supporters of the Unified Communist Party of Nepal (Maoist) blocked traffic and prevented government employees entering offices in Kathmandu to protest the president’s refusal to fire the army chief.

Protesters gathered in the administrative hub of the capital today as the government deployed security personnel and instructed all “high level officials” to go to work, Nepalnews.com reported.

Puspa Kamal Dahal, who led a 10-year Maoist insurgency, resigned as prime minister on May 4 after President Ram Baran Yadav overturned his decision to dismiss Army Chief of Staff Rookmand Katawal for refusing to integrate former rebel fighters into the military.

Dahal’s party ended its fight to overthrow Nepal’s 240- year-old monarchy in 2006 under a United Nations-backed peace accord and the rebel leader became prime minister in August last year following general elections. Maoist protests since Dahal’s resignation are obstructing parliamentary business and delaying the drafting of a new constitution.

The Maoists refused to join a new government headed by the Communist Party of Nepal (Unified Marxist Leninist) and want the president either to resign or fire the army chief. They also want all parties to declare the president’s reinstatement of Katawal “unconstitutional.”

Schools in Kathmandu remained closed because of the demonstration, Nepalnews.com reported.

Relations between the army and the Maoist-led government were strained earlier this year when the military went on a recruitment drive and said it had filled all vacancies in the 93,000-member force. The army resisted integrating former rebels, a condition of the peace accord, saying they’ve been politically indoctrinated.

To contact the reporter on this story: Jay Shankar in Bangalore at jshankar1@bloomberg.net

Last Updated: November 12, 2009 01:12 EST