Authorities on Thursday lifted a curfew in a western Nepalese border town that was wracked by violent clashes between residents and rural migrants earlier this week, an official said.
The curfew was imposed Tuesday in Nepalgunj after street battles left one person dead and at least 25 injured. Several buildings were burned to the ground.
The situation has improved in Nepalgunj and there were no signs of trouble, local administrator Krishna Acharya told the agency on Thursday by telephone from the town, which lies 500 kilometres west of the capital Kathmandu.
Life was beginning to return to normal with shops opening and public transport returning to the roads, Acharya said.
He added that politicians and local leaders had defused the situation with peace rallies and by talking to the crowds.
The fighting erupted when migrants from the mountains surrounding the town clashed with local residents after accusing them of burning their cars during a protest.
There is a long history of communal divisions between people in mountainous regions and those living in the Himalayan nation's southern plains.
The people in the southern plains, known as the Madeshi, have long complained of discrimination, including being denied citizenship and other rights.
They say that because the capital is in the northern mountains, and that the majority of the kingdom's rulers all hail from that area, they are left out of development and policy-making.
On Thursday, some leaders at a peace rally in Nepalgunj called for an end to religious and communal violence.
"We need to be united to face these conspiracies that are being brought to derail the peace process," said Matrika Yadav, a local Maoist rebel leader.
The government and Marxist rebels recently signed a peace accord to end an 11-year communist rebellion, and the former rebels are set to join the government.