Kathmandu- Nepalese politicians on Friday moved closer to resolving the country's three-week political crisis after the Maoists agreed to allow parliament to hold a session to elect a new prime minister.

The Maoists have prevented the parliamentary session from going ahead since May 4, demanding the president withdraw his decision to reinstate the army chief sacked by the Maoist-led government.

The president's action led to the resignation of Prime Minister Pushpa Kamal Dahal, but disruption of parliament has prevented the formation of a new government.

"Under the agreement, caretaker Prime Minister Pushpa Kamal Dahal will address parliament on Friday, and parliament will initiate the election process with the voting scheduled for Saturday," said Bhim Acharya of the Communist Party of Nepal-Unified Marxist Leninists (CPN-UML).

The agreement between the political parties paved the way for the formation of a government led by the CPN-UML, and its leader, Madhav Kumar Nepal, was expected to be elected prime minister.

Madhav Kumar Nepal has the support of 350 members from 22 political parties in the 601-seat Constituent Assembly.(dpa)