Kathmandu  - Nepal's three main political parties Tuesday agreed on the system of government paving the way for the Maoists to head the new government.

The agreement came after three days of talks over differences between the Maoists, who want a powerful president, and the Nepali Congress and the Communist Party of Nepal - Unified Marxist Leninist (CPN-UML), who want a ceremonial president as the head of state and a prime minister with full executive powers.

"The Maoist dropped their demands for powerful president which paved the way for agreement," General Secretary of CNP-UML Jhalanath Khanal told reporters.

"The meeting also agreed to draft a proposal to declare the country a republic which will be tabled at Wednesday's meeting of the constituent assembly," Khanal said.

Khanal said he expected the proposal to pass without a problem and Nepal would officially become a republic.

The government has also decided to declare three days of national holiday to celebrate the declaration of republic starting Wednesday.

The agreement came as newly elected members of the constituent assembly took an oath of office in the Nepalese capital Kathmandu.

The members, who represent Nepal's diverse ethnic groups, took their oaths in more than 40 languages.

Security has been tightened across the Nepalese capital ahead of Wednesday's meeting.

Meanwhile, a strike called by a group calling itself the Terai army against the declaration of republic has paralysed transport and normal life in several districts in southern Nepal.

Media reports said the strike had shut down shops, educational institutions and transport has been halted but there have been no reports of violence. (dpa)