A Nepali soldier killed 11 people and wounded 19 after an argument at about midnight on Wednesday. One of the injured died later in hospital. The army said the soldier also died in the incident.
"We have called on transports, businesses, factories and schools to close to protest the killing of innocent people," Subash Nemwang, a leader of the Communist Party of Nepal-UML, the country's second-biggest party, told Reuters on Thursday.
Nemwang blamed the government of King Gyanendra, who seized power on 1 February, for the deaths of villagers who had gathered near a temple at the tourist town of Nagarkot, about 30km (20 miles) from Kathmandu.
The army, which said it had taken the incident very seriously, has ordered an investigation into the incident.
King Gyanendra seized power by
dismissing an elec ted government
State television said the government would pay for hospital treatment and pay $2000 in compensation for each of the dead.
Nemwang said the opposition parties planned to organise protest rallies in the hill-ringed capital of 1.5 million people on Friday.
The strike call came as thousands of people marched through the streets of Kathmandu in a protest against the king which turned into a show of solidarity for the relatives of those killed at Nagarkot.
Nearer the site of the killings, 2000 people, including relatives and friends of the victims, burned tyres and protested.
"You can't just kill people," they shouted outside a hospital where the bodies of the victims were taken for post-mortem examinations.
Dozens of riot police stood guard as relatives waited to receive the bodies.
"I heard the sound of bullets as I was preparing to sleep. I was terribly scared" Sohan Shrestha, who had come to collect the body of his son, said at the hospital, tears rolling down his cheeks.
"I heard the sound of bullets as I was preparing to sleep. I was terribly scared"
Sohan Shrestha, the father of one of the victims
Witnesses said the villagers had gathered to mark the full moon on Wednesday at the temple on a hilly terrace.
"Bloodstains littered the entire temple," journalist Deepak Rijal told Reuters after visiting the site. "The villagers are terrified."
Human rights groups say the poorly trained Nepali army regularly commits human rights abuses in its battle to quell a Maoist rebellion.
More than 12,500 people have died in the anti-monarchy conflict, which has also shattered Nepal's aid-and tourist-dependent economy.