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KATHMANDU, Wednesday (AFP) Nepal's caretaker Prime Minister Sher Bahadur Deuba will postpone upcoming parliamentary elections after conferring with the king, cabinet sources said.

Leaders of political parties have urged Deuba to delay the polls, scheduled to start in November, because of an ongoing Maoist rebellion.

"Prime Minister Deuba held a marathon cabinet meeting Monday taking stock of the current political situation and the plea of all the political parties to reschedule the November 13 elections," the source said.

Deuba is scheduled to meet King Gyanendra to discuss the situation.

"After holding the talks with the king, Deuba's cabinet will announce new dates for the elections," the source said.

Deuba told a national conference of the Nepali Congress Democratic party on Monday that he wanted to postpone the polls, which he called two years ahead of schedule after dissolving parliament in May.

"The postponement of the elections is necessary in view of the current law and order situation," he said.

"I can assure you that the polls will be re-scheduled...," he said.

Maoist rebels have been waging a 'people's war' to topple the constitutional monarchy since 1996, with the loss of more than 4,900 lives. Two-thirds of the deaths have come since the rebels broke a four-month ceasefire in November 2001.

The rebels are in control of much of the country and other areas are held by the army.

But according to Nepal's constitution elections have to be held.within six months of the dissolution of parliament.

The Nepali Congress Tuesday said postponing the elections would be unconstitutional and insisted that they should be held on time.

"We think the elections should be held on time after improving the law and order situation in the country," said spokesman Arjun Narsingh KC.

"If the elections cannot be held, then the parliament dissolved on May 22 should be revived," he said.

"The postponement of the elections would be unconstitutional therefore we demand either elections be held on time or the parliament be revived."

King Gyanendra dissolved parliament in May on Deuba's advice as the house looked set to defeat an extension of emergency rule, which gave security forces more power to impose curfews and detain and interrogate suspected Maoist rebels.

The king instead decreed another three months of emergency rule, which expired August 28.

The Nepali Congress has split in two over the decision to call early elections, with factions headed by Deuba and his predecessor as premier, Girija Prasad Koirala, expected to run against each other.

The Nepali Congress held 113 seats in the dissolved 205-seat parliament, compared with 69 for the NCP-UML.

Meanwhile Nepal's tourism industry, a major source of foreign exchange and a huge employer in the Himalayan kingdom, has been hit by recent attacks on holidaymakers by Maoist rebels, officials say.

The guerrillas have been fighting for a communist republic for more than six years and more than 4,900 people have died in the violence, but they have very rarely targeted tourists.

However last week a group of people, believed to be Maoists, set fire to luxurious hotel in the western town of Pokhara, where many tourists are based before they set out on trekking and climbing trips in the Himalayas, tourist industry officials said.

A German couple were staying at the hotel, but were rescued by staff and were unharmed.

"The renowned Begnas Lake Resort and Villa was attacked last week by a group of unidentified people believed to be Maoists who destroyed 30 million rupees (38,000 dollars) worth of property," Madhav Om Shrestha from the Hotel Association of Nepal (HAN) told AFP.

"We were shocked to hear about the incident and we strongly condemn the brutal attack," Shrestha said.

He said Maoists had also attacked a German trekker heading for the Mount Annapurna region.

They tried to snatch his camera and money, but he was rescued by local villagers and taken to Pokhara. He received minor injuries and was treated in hospital.

"HAN demands action against those responsible for the attacks on the German trekker and the Begnas Lake Resort and Villa to avoid such incidents in future," Shrestha said.

He said these incidents were putting tourists off coming to Nepal, which saw a huge drop in foreign visitors after last year's September 11 attacks. 

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