Thousands of Maoists have converged on the Nepalese capital, Kathmandu, ahead of a planned May Day rally on Saturday.
Members of the Maoist youth wing as well as ordinary supporters are camping in hundreds of private schools that they shut down last week.
Maoist leaders insist that Saturday's demonstration will be against the government and will be non-violent.
However, tension is mounting in the capital where the security forces have been put on high-alert.
On Monday Maoist leader Prachanda urged the public to support the nationwide street protest aimed at toppling the current government.
He said Saturday's protest - to be followed by a general strike - would be a massive but peaceful show of popular will.
Prachanda said the Maoists had "no alternative" but to exert pressure on the government which he said had no intention of moving the peace process forward or writing the constitution before the deadline of 28 May.
The Maoist party has the largest number of seats in parliament and wants to lead a national government.
BBC Nepali service editor Rabindra Mishra says political stalemates have been averted many times in the past in Nepal, often at the last minute.
There is still time for this to happen before the planned protests at the weekend, he says.
However, the scale of the current crisis and the fact that neither side seems willing to back down suggests the Maoists and the government could well be headed for a showdown, our correspondent says. - BBC