One man was killed and dozens hurt with the condition of six serious as tension simmered in a frontier town in western Nepal on Wednesday after clashes, arson and looting triggered by shutdown to protest the new Constitution.

A young man named Kamal Giri was killed Tuesday evening when police fired on a mob that had ventured out on the streets of Nepalgunj, a key administrative town in Banke district, about 320 km west of Kathmandu, defying indefinite curfew clamped from the morning to bring the situation under control.

Though riot police personnel rushed to the area, the town continued to smoulder on Wednesday with a peace rally taken out by the ruling parties as well as Maoists being forced to disperse after coming under a fusillade of stones and bricks by lurking mobs, media reports said.

The violence, that deteriorated into clashes between the hill and plains communities, stoking an old feud, left the government of Prime Minister Girija Prasad Koirala red-faced as it was triggered by its junior partner, Nepal Sadbhavana Party-Anandi (NSP).

The NSP had called a closure of districts in the southern Terai plains belt Monday to show its anger at the new constitution finalised by Koirala and Maoist supremo Prachanda December 16.

The party of plains people says the new constitution doesn't redress the longstanding woes of the community.

They lack access to education, healthcare and government jobs, including employment in the army.

Thousands of plains people do not have citizenship, despite living in Nepal for generations, and fear they will not be able to vote next year, when a crucial election is held to decide if the country should remain a kingdom or become a republic.

Monday's general strike crippled Nepalgunj with rampaging crowds setting public buses on fire, looting shops and fighting back security forces.

Though the NSP denied any hand in the vandalism, saying it was caused by pro-king forces trying to sabotage the June elections, the matter snowballed on Tuesday with angry transporters demanding compensation and blocking highways.

The protests turned violent despite the imposition of curfew.

The alarmed seven-party ruling coalition and the Maoists, joined by business lobbies and rights activists, tried to take out a peace rally at 8 am on Wednesday, urging people for restraint. However, the march broke up after being hailed with bricks and stones.

Nepal's official media quoted the lone NSP minister in the cabinet as saying his party was not responsible for the violence.

"Our protest ended at 5pm Monday," Hridayesh Tripathi, the commerce, industry and supplies minister, told the state media.

"The violence started after that. It was caused by regressive forces trying to sabotage the election."