Kathmandu, Jan 22 (IANS) Clashes between Nepal's elite hill community and Madhesis, people of Indian origin, continued to simmer for the fourth successive day in southern plains with two more people, including a 15-year-old student, dying Monday when police fired on demonstrators in turbulent Lahan town.

Lahan in Siraha district, where sectarian violence erupted Friday, remained tense with Pramod, a ninth-grader, and Vijay Kumar Sahani succumbing to bullet injuries while being taken to hospital. They received injuries along with other demonstrators when police fired on them, reportedly to stop the crowd from attacking a police station.

That was the second killing of a student in the town since Friday when a 17-year-old boy was killed in a clash between the protesters and the Maoist guerrillas who tried to defy the transport closure enforced by the former.

The district administration clamped curfew from 4 p.m. to 4 a.m. to bring the situation under control.

A group of people, united under a little-known organisation called the Madhesi Janadhikar Forum, began demonstrations in the town Monday morning that turned violent.

The protesters, who had set over a dozen government offices on fire Sunday, reportedly tried to attack the area police office, which provoked police action.

A shopkeeper of Indian origin, Rajendra Chaudhari, was killed in another southern district, Sarlahi, near the Indian border Sunday evening while he was closing his shop and returning home. Reports from the district said a group of assailants had also looted about NRs.70,000 from the victim.

Alarmed by the escalating violence, Prime Minister Girija Prasad Koirala Monday called an emergency meeting of the top leaders of the seven-party ruling alliance as well as the Maoists who are poised to join the government soon.

While the meeting asked the Forum and other plains organisations to begin talks to resolve their problems, the crisis showed no sign of abating.

Besides the violence in the south, the capital and other key cities lay paralysed by an indefinite transport strike called by bus owners that reached its second day Monday without showing any signs of resolution.

The National Federation of Nepal Transport Entrepreneurs has called the strike to demand security and compensation after Forum activists went on a rampage and torched more than 14 buses in Lahan Friday over the teen's killing.

Though the emergency meeting advised the government to compensate the vehicle owners as well as the victims' families, no formal announcement has been made so far.

Sectarian clashes between Nepal's elite hill community and Madhesis erupted Dec 25 after a Madhesi party, which is a junior partner in the government, called a Terai shutdown, alleging that the new constitution had done nothing to resolve the exclusion of the community from all kinds of government opportunities.

Since then, violence, looting and arson have been occurring in the southern districts with many shops and vehicles being set on fire.

Both the government and the Maoists have begun expressing fears that the supporters of King Gyanendra are trying to instigate violence.

Senior Maoist leader Dev Gurung, who was nominated as a legislator by his party this month, told the media that royalists trying to protect the king were stirring up trouble in the plains, taking advantage of genuine problems.

"These are people trying to stop Nepal from becoming a republic," Gurung said. "The chaos is aimed at stopping the elections from being held by June."

Nepal's seven-party government has pledged to hold a constituent assembly election by June when an elected assembly will decide if the 238-year-old institution of monarchy should be retained or axed for a republic.

The king, who grew highly unpopular after seizing power through a bloodless coup two years ago, was stripped of all privileges by the new government formed after the fall of the royal regime.

A new constitution promulgated this month finally removed him as head of state and put monarchy in suspension till the June elections.

With the violence across the border and involving people of Indian origin, New Delhi is monitoring the situation closely.