Nepal's King Gyanendra has said he will end his direct rule of the country and hand back power to political parties.

"Executive power of the kingdom of Nepal, which was in our safekeeping, shall from this day be returned to the people," he said in a speech broadcast on Nepal television on Friday.

He called for "a meaningful exercise in democracy" with  elections "as soon as possible".  

"We therefore request the seven-party alliance to recommend at  the earliest a name for the post of prime minister who will have the  responsibility to run the government," he said.  

"We are committed to multi-party democracy and to constitutional  monarchy," said the grim-faced monarch, who spoke slowly and wore a  traditional topi hat.  

"We hope peace and order is restored in the country."

His announcement followed weeks of mass protests against his direct rule during which at least 12 people were killed.

Offer rejected

Nepali political parties, however, rejected the king's offer as insufficient.

The Nepali Congress said protests would continue.

"The king has not clearly addressed the road map of the protest movement," said Krishna Prasad Sitaula, a party spokesman. "Our protest campaign will continue."

"The king has been defeated but the defeat is not complete,"  said Nepali Congress-Democratic party spokesman Minendra Rijal.

"He says he is giving power to the people but the statement is  influenced by his own agenda focusing on general elections," he  said.  

"Anything less" than elections to a constituent assembly was  "now unacceptable".  

"To make sure that the autocracy is completely defeated, the  movement will go on," he vowed.

Early elections

Gyanendra called for elections to be held as soon as possible and for political parties to nominate a new prime minister.

"We therefore request the seven-party alliance to recommend at the earliest a name for the post of prime minister who will have the responsibility to run the government, " he said.

"We are committed to multi-party democracy and to constitutional  monarchy," added a grim-faced Gyanendra.

Over 100,000 pro-democracy activists had gathered on the edge of the capital Kathmandu earlier on Friday in protest at the king's rule.

The Nepali government had imposed a daytime curfew on the capital and ordered those breaking it be shot on sight in a desperate attempt to halt the demonstrations that have disrupted the country for over two weeks.

Takeover

King Gyanendra dismissed the government in February last year, saying it had failed to defeat Nepal's Maoist insurgency, which has left more than 13,000 people dead.

He had also come under intense international pressure to make concessions to the protesters.

Hours before his speech, James Moriarty, the US ambassador, said the king's time was "running out".

"Ultimately the king will have to leave if he doesn't compromise."

On Thursday, India sent a top envoy to Kathmandu to tell the king he had to open a real dialogue with the opposition to halt the bloodshed.

PHOTO CAPTION

Nepal's King Gyanendra speaks on television in Nepal in this April 21, 2006 video grab. (Reuters)