Kathmandu, April 29 (Reuters): Nepali political parties discussed the fate of the once-revered monarchy and proposals to set up a Constituent Assembly today, just days after the king ceded power in the face of mass protests.

Other weighty issues on the agenda, a day before they debate a proposal for a special Assembly to write a new constitution, included an expected decision to match a ceasefire announced by Maoist rebels.

Bowing to weeks of often bloody protests, King Gyanendra restored parliament this week and handed power to the Prime Minister named by seven political parties that led this month’s pro-democracy demonstrations, in which at least 13 people died and thousands were wounded.

Prime Minister designate Girija Prasad Koirala, in a notice to parliament which convened for the first time in four years yesterday, proposed elections for the Assembly to draw up a new constitution, hold talks with Maoist rebels and declare a ceasefire.

The second sitting on the parliament is due to convene at 1015 hours GMT tomorrow to discuss the plan. Party officials said they were giving final shape to their positions.

“All seven political parties are committed to the Constituent Assembly and the Prime Minister’s proposal will be passed without any problem,” said Subhash Nemwang, a top leader of the Communist Party of Nepal (UML), the second biggest political party.

“After the House approves the proposal, the Constituent Assembly will become a national commitment.”

The parliament is expected to give directives to the new government to match the ceasefire announced by the rebels earlier in the week and start talks with the guerrillas.

“Once we hold talks and arrive at a consensus with the Maoists, we’ll fix the date for the election to the Constituent Assembly,” Nemwang said.

Life in Nepal’s temple-studded capital, the flashpoint in this month’s anti-king protests, has largely returned to normal after Gyanendra’s announcement on Monday evening he was reviving parliament and surrendering power to the seven parties.

Yesterday, thousands protested outside the parliament gate reminding legislators that they should not back down from curbing the king’s power, a key demand of the Maoists to end their decade-old conflict in which more than 13,000 people have died.

Also yesterday, the rebels kept up pressure for the abolition of monarchy when the leader of their student wing addressed a public rally in the capital.