A member of the explosives squad walks in a park where a small explosion took place in Kathmandu on Tuesday. 2008. (Prakash MathemaAFP/Getty Images)

Police fanned out across Kathmandu on Tuesday as Nepal's new legislative assembly, which is widely expected to abolish the country's 239-year-old monarchy, was sworn in.

Despite the heightened security in the capital, two people were slightly injured in a bomb explosion in a park in the city centre.

There was no immediate claim of responsibility. Police said pamphlets from a pro-royalist group were found near the blast.

There were three small bomb explosions Monday.

The attacks underscored the challenges the new assembly faces in trying to bring peace to the war-racked country.

The 575 legislators who took the oath of office Tuesday are to govern Nepal as they rewrite the country's constitution, a key step in the peace process that ended a 10-year insurgency by Maoists rebels. The guerrillas joined the political process as a legal political party in 2007 and won the most seats in elections last month.

The assembly begins working Wednesday. Its first order of business is supposed to be declaring Nepal a republic and doing away with the Shah dynasty, which dates to 1769, when a regional ruler conquered Kathmandu and united Nepal.

The dynasty was devastated in June 2001 when a drug-crazed prince opened fire with a machine gun at a party, killing his father, the king, his mother and seven other close family members.

The prince was later found dead of an apparently self-inflicted gunshot wound in the palace grounds.

UN condemns political violence

A "republic will be declared tomorrow [Wednesday]," Baburam Bhattarai, deputy leader of the Maoists, said after the ceremony. "Once a republic is declared, the king will automatically lose his position and place in the palace."

The Maoists hold the most seats in the assembly but are still struggling to form a coalition government, and political violence has persisted despite the two-year peace process.

The chief of a high-profile United Nations political mission in Nepal, Ian Martin, warned Tuesday that the violence threatens the peace process and criticized Nepal's politicians for doing little to stop it.

Politically motivated killings have been committed by virtually every major political group since the Maoists gave up their guerrilla war two years ago, and Martin said he hoped that now "there can be a new commitment to justice and law and order from all political parties."

Authorities in Kathmandu have banned protests near King Gyanendra's palace.

Gyanendra has so far refused to heed calls that he leave his palace before Nepal is declared a republic, prompting senior officials to threaten that he could be removed by force.

"If he refuses to leave the palace, we will use the law to force him out of there," Bhattarai said.

No agreement on form of republic

The process of replacing the monarchy with a republic began more than a year ago when Gyanendra was stripped of command of the army and almost all of his other powers.

His portrait has disappeared from shop walls and from the currency. The word "Royal" has been removed from the name of the army and national airline, and references to the king are gone from the national anthem.

Political analysts in Nepal say there is no agreement among leaders in the new assembly about the form of government that replaces monarchy and the days ahead are bound to be tense and potentially dangerous.

Some parties favour a strong, executive presidency and others a British-style cabinet, led by a powerful prime minister with a ceremonial head of state.

With files from the Associated Press