Nepal's King Gyanendra has called for general elections, while thousands of demonstrators took to the streets Thursday to protest his government.
In a short address on state-run media the king also urged dialogue with the opposition. Thursday's protesters called for a special assembly to write a new national constitution for Nepal.
The peaceful demonstrations came hours after Nepali troops used rubber bullets, tear gas and batons to break up a pro-democracy rally staged by hundreds of lawyers in Kathmandu.
It was the eighth day of protests against the monarch's rule. Meanwhile, the State Department issued a travel warning for Americans.
The U.S. Embassy in Kathmandu also has allowed non-emergency employees and family members of staffers to leave the Himalayan kingdom due to ongoing unrest.
Earlier the United States has canceled this week's visit to Nepal by a congressional delegation, citing safety concerns.
The United Nations High Commissioner for Human Rights Louise Arbour expressed alarm over the use of excessive force against pro-democracy protesters.
She reminded the government of King Gyanendra "of its international obligation to respect the right of peaceful assembly."
Earlier Thursday the government lifted the night-time curfew in the capital and restored mobile phone services ahead of the country's Hindu New Year celebrations that fall on Friday.
The king dismissed the elected government and seized absolute power in February last year, saying he had to act because the government had failed to control a violent Maoist insurgency. Nearly 13,000 people have been killed in the decade-old conflict.