Nepal's president gave the government and opposition parties until Aug. 21 to form a national government after Nepal's prime minister resigned following six months of stalemate.
Nepal got a new prime minister after seven months of a leadership vacuum. Some say the new coalition may result in boosting the agenda of the Maoist party.
The Nepal election on Wednesday failed to secure enough parliamentary votes to select a new prime minister. A runoff is scheduled for Friday.
Nepal's Maoists had pressured the prime minister to resign since he replaced their leader a year ago. As the largest party in parliament, they hope to lead the next government.
Nepal's Maoists ended a six-day general strike that had angered citizens and prompted 10,000 people to demonstrate in Kathmandu Friday. The move may signal their willingness to adopt a more conciliatory political stance.
Nepal's Maoists – former rebels who joined a peace process in 2006, won the right to govern in 2008, then resigned after a dispute a year later – say they will continue their protests until they are returned to power. The nationwide strike began Sunday.
Former Prime Minister Girija Prasad Koirala's death could undermine the fragile Nepal government, which has until May 28 to write a new constitution. Mr. Koirala loomed large in Nepal's transition from monarchy to republic after a long civil war with Maoists.
Political consensus on key issues surrounding the country's peace process will now be even more difficult as the Maoists gear up to become the main opposition party, analysts say.
Prime Minister Prachanda resigned Monday after coalition partners and the president opposed the move.