No group has claimed responsibility, but the authorities suspect that the purpose was to create panic before the elections.
 
Earlier, a similar blast injured at least one person near the UN mission in Kathmandu.

The elections on Thursday are for an assembly that will rewrite the country's constitution, and possibly end the country's 240-year-old monarchy by removing King Gyanendra.

Maoists criticised

A UN report has said that the Maoists, who are taking part in elections for the first time, are the worst perpetrators of pre-poll bullying.

"Voters must have confidence in the secrecy of the ballot so that they can vote according to their conscience," Kieran Dwyer, a UN spokesman, said.

Nepal's southern plains have seen sporadic unrest since the 2006 peace agreement.

Ethnic protesters in the southern Terai region say they are discriminated against by highlanders and have been demanding federal powers.

Protest threat

The Maoists have accused Gyanendra and his allies of stoking the violence in order to undermine the peace deal and the push for the country to be declared a republic.

They have vowed to respect the election results but will launch major protests if they feel the polls have been rigged against them.

"If Maoists were defeated through riggings, the people will seize power within 10 minutes, not 10 days," the Kathmandu Post newspaper recently quoted Baburam Bhattarai, the Maoists' deputy leader, as saying.