One guerrilla also died in the violence, the army said, amid tight security as a nationwide general strike called by the Maoists entered its third day.

The municipal elections are the first to be held in seven years in the impoverished Himalayan nation, which has been wracked by political turmoil.

Maoist leader Prachanda, whose call for a week-long general strike has ground Nepal to a virtual halt, Tuesday again urged voters not to take part in controversial local polls called by the king.

"Our party would like to make a final and special appeal to the general public ... to boycott the municipal polls and take the movement for democracy and peace to a new height," Prachanda said in an emailed statement.

The nationwide general strike called by the rebels had been effective and was a sign that few people would vote today, said Prachanda, whose name means "the fierce one".

"The success of our general strike has made it clear that the public opinion is against the municipal polls slated for tomorrow (Wednesday)," the Nepal Communist Party (Maoist) chairman said.

The Maoists, fighting for the past decade to overthrow the monarchy, have stepped up violence in a bid to derail the polls that the rebels and opposition parties say are a sham aimed at perpetuating Gyanendra's control of the tiny nation of 26 million people.

"Seven security personnel were killed in two separate overnight attacks in two different districts," an army headquarters official told AFP.

Three soldiers and two policemen died when rebels stormed the district headquarters town of Gaighat, 400km east of Kathmandu late Monday. The body of a guerrilla was also found.

A soldier and a policeman were killed during a rebel attack in Panauti 30km southeast of Kathmandu, he added.

Maoist guerrillas fired on an army patrol in east Nepal and gunned down a taxi driver as violence continued ahead of the country's first local election in seven years.