The peace agreement between the ruling Seven Party Alliance (SPA) and the Maoists is not working at the ground level, as conflicts between the rebel group and the state administration continues to rise.
In one such incident, Maoists prevented the opening of police stations here, along the Indo-Nepal border.
"When there was violence and the people were insecure, the policemen fled but today when the people are secure, the police have come back and started harassing the people, said Pradeep Pandey, a Maoist leader.
He further said that if they had come after the interim government was established they would have got more support.
"They are following the same pattern of the harassment they had earlier followed. After the Interim Government is established, we would welcome a police station wherever they set it up according to the situation. We want the police but not now," Pandey said.
But police officials said the local people wanted their presence and only the Maoists were coming in the way.
"Only two per cent of the people do not want us here. They are the Maoists and they are working hard to dislodge us.
The rest of the 98 per cent of the people support us," said Suryabhan Chowdhery, In-Charge of Police Post.
"We do not need the Maoists, we need the police. When some crime takes place, it is the police, which come to our disposal. Who will save us when these Maoists attack us?" said Prabaha Gupta, a resident.
Maoists also charged the Interim Government of ignoring their views on appointment of envoys to several key countries.
They have already called a two-day nationwide general strike to protest the appointments of envoys.
Maoists chief Prachanda called for the shutdown to begin on December 31 to press the multi-party government to revoke the appointments.
Last month, the Government and Maoists signed a landmark peace deal declaring an end to the decade-old conflict.
Nepal's ruling alliance and Maoists had approved the draft of an interim constitution that paves the way for Maoists to join a interim parliament and government.
It was signed by Nepal Prime Minister Girija Prasad Koirala and Prachanda.
The draft was approved after three days of intense negotiations between the two parties over several issues — including whether King Gyanendra should remain the interim head of state until elections for a constituent assembly.
Maoists are to join an interim cabinet after storing their weapons under United Nations supervision in the run up to next year's elections for a special assembly to map the country's political future and decide the fate of the monarchy.
They say the government should not take long-term decisions until they join administration.