The rebels, fighting for the last decade to topple the monarchy, raided Malangwa, a town 350km southeast of Kathmandu, late on Wednesday.

Five policemen and two guerrillas were killed in the fighting, a local journalist said. An army helicopter sent to the area crashlanded and three unidentified bodies were lying near the aircraft, an army officer said without elaborating.

AP reported quoting officials from neighbouring districts that the rebels bombed half a dozen government offices, freed inmates in the local jail and attacked army and police bases during the overnight attacks.