After residents rushed out to buy groceries and supplies, the city was nearly deserted on Friday as 15,000 soldiers and policemen patrolled the streets.
The 8am to 6pm curfew has been ordered to prevent a rally organised by Nepal's seven main political parties to protest King Gyanendra's seizure of power last February after he sacked the interim government.
The government has said the rally must be stopped because it has information that communist rebels plan to use the event to stage attacks. Maoist guerrillas have been fighting to set up a socialist government.
An anonymous senior government official said troops were guarding strategic areas and would ensure there are no disturbances.
The curfew follows a series of sweeping raids on Wednesday in which security forces detained 78 senior politicians, student leaders and rights activists the National Human Rights Commission said in a statement.
Kamal Thapa, the Nepalese home minister, said: "We were compelled to take some preventive measures because we have information that the Maoists are planning to create confusion and trigger violence during the rally. We have to protect the people and maintain peace and tranquility."
Thapa said several people have been temporarily detained but refused to provide further details.
The government had issued orders to arrest some 200 people, but had managed to apprehend less than half that number. Some of those who evaded police said they were still trying to organise the protest.
Ram Sharan Mahat, a senior leader of Nepali Congress, said he was unable to contact colleagues since they were either in jail or in hiding.
The authorities blocked the internet and both landline and mobile telephone services on Thursday, but later restored landlines and internet communications.
The last time such measures were taken was last February, when the government sought to stifle dissent after Gyanendra assumed direct rule.
150,000 people took to the
streets in a pro-democracy rally
Gyanendra had charged the previous administration with failing to fight corruption or contain the communist insurgency.Last week, 150,000 people led by pro-democracy activists gathered in a southwestern Nepal town in the largest political rally since the king's power grab.