KATHMANDU - Nepal was Thursday set for a landmark vote on its political future, marking the climax of a peace process with Maoist rebels and the probable end of its centuries-old monarchy.

Tensions are high in the impoverished nation, with the last days of campaigning plagued by deadly violence, complaints of voter intimidation and concerns embattled King Gyanendra's loyalists may be plotting to fight back.

Voting begins at 0700 (0115 GMT) and ends at 1700 (1115 GMT), but the results of the historic polls will not be known for at least three weeks, election officials said.

The elections are a key demand of Nepal's Maoists, who fought the central government for a decade in a bitter insurgency that left at least 13,000 people dead and crippled the economy of one of the poorest places on earth.

"It is time to replace the old feudalistic and corrupt thinking and values with a new republican thinking," the charismatic rebel leader Prachanda said on the eve of what he said would be an "epoch-changing" election.

Prachanda -- a school teacher turned revolutionary leader who lived underground for 25 years -- has also called for calm, after several of his loyalists were shot dead by police.

But the Maoists are under close scrutiny: although they have formally renounced violence, widespread reports of voter intimidation by Maoist loyalists suggest many of them are failing to adapt to civil life after their bloody guerrilla war.

Also being watched is sidelined Gyanendra, who assumed the throne in 2001 after much-loved former king Birendra and most of the rest of the family were massacred by a drunk and stoned crown prince.

Gyanendra's survival of the "palace massacre" has led many Nepalis to believe he was somehow complicit.

He lost even more support when he dismissed the government and assumed absolute power to fight the Maoists -- a move that eventually brought mainstream parties and the rebels together and into the 2006 peace pact.

But he can still count on support from sections of the army and Hindu fundamentalists who see him as the incarnation of a Hindu god.

The polls will be the most closely watched in the Himalayan country's history.

The United Nations will be monitoring across the country, plus keeping an eye on thousands of hardened Maoist fighters who have been confined to camps for the past year under the peace deal.

The European Union has sent a team of election observers, and former US President Jimmy Carter is also in Kathmandu, heading his own team of observers.

Large numbers of police have been mobilised nationwide, and even alcohol has been banned in an effort to keep the polls peaceful. All public and private transport will be off the roads.

Nepal's election commission said it was confident of smooth proceedings.

"There is an overwhelming enthusiasm for the election. We are expecting a turnout of over 65 per cent," commission head Bhojraj Pokhrel told reporters.

Close to 18 million people are eligible to vote, one third of them for the first time.

Nepal's main parties, the centrist Nepali Congress and the centre-left Communist Party of Nepal (Unified Marxist-Leninist), are expected to grab most of the seats.

The big question, say analysts, is whether the outcome gives the Maoists -- still classed by Washington as a "terrorist" organisation -- enough political clout to motivate them to stay within the democratic system.

The Brussels-based International Crisis Group has warned the post-vote period "will likely be difficult and dangerous."

"Nepal has many possible flashpoints, not least that the two armies that fought the war remain intact, politically uncompromising and combat-ready," the think-tank said, referring to the Maoists and the pro-royal national army.