Protests have spread across Nepal
It takes to 10 the number of people killed during rallies calling for an end to direct rule by King Gyanendra.
An 18-hour curfew has been announced in the capital from 0200 (2015 GMT), ahead of a planned rally on Thursday.
The authorities seem increasingly unable to cope, reports the BBC's Charles Haviland in Kathmandu.
They have warned that those who violate the curfew in Kathmandu could be shot.
Earlier, two senior opposition leaders - the Communist Party (UML) leader Madhav Kumar Nepal and Ram Chandra Poudel of Nepali Congress - were freed from jail as an Indian special envoy flew in for crisis talks.
UN condemnation
The Indian diplomat, Karan Singh, is to meet King Gyanendra and opposition politicians. He is expected to express Delhi's concern over the rising instability in Nepal.
Locals and tourists in Nepal give their views on the crisis
In pictures
The latest killings, in Jhapa district, appeared to be a bloodbath, correspondents say.
Reports from the scene in the town of Chandragardi suggest that at one point the crowd of anti-royal demonstrators started to run.
The security forces are said to have channelled protesters towards a stadium and then opened fire. Many people were injured.
International condemnation of the crackdown on the protesters has been growing.
The UN's special human rights representative to Nepal, Ian Martin, said on Wednesday that the government must respect international standards and show restraint.
They ought to be allowing peaceful assembly, Mr Martin said, rather than "closing off the avenues by which people can protest peacefully".
'Teachers arrested'
Earlier, it emerged that a woman injured by a tear gas shell fired during a protest in the western town of Nepalganj on Tuesday had died.
India is seriously worried with the worsening situation in Nepal
Indian envoy Karan Singh
In pictures: Protest strike
Meanwhile, security forces are reported to have arrested some 250 teachers who joined anti-monarchy protesters in the town of Pokhara, a Himalayan trekking hub some 200km (120 miles) west of Kathmandu.
Dozens, including troops, were hurt in clashes in the tourist town.
Wednesday was the 14th day of a nationwide shutdown called by the opposition in protest at the king's coup.
An addition to Thursday's planned curfew in the capital, the government has doubled the period of detention orders on a number of imprisoned human rights campaigners and opposition politicians.
India 'worried'
The Indian envoy said his prime minister had asked him to take a message to the king and "make a general assessment of the situation".
According to the BBC's Sanjoy Majumder in Kathmandu, the Indian envoy will tell the king it has become extremely difficult for Delhi to continue backing him - though India does not really want the monarchy to wither away.
India borders Nepal and is a major ally.
"India is seriously worried with the worsening situation in Nepal," Mr Singh told the BBC.
"People in Nepal are also suffering a lot. Violence and anarchy is continuously increasing," he said.
India has decided to send Karan Singh as the Prime Minister's special Envoy to Nepal. Singh is scheduled to hold talks with King Gyanendra as well as the leaders of the Nepalese pro-democracy movement, in an effort to end the deepening political crisis in that country. 

Nepal has witnessed growing protests against King Gyanendra's decision last year to dismiss the government and assume direct rule. Since then, a seven-party opposition alliance has led nationwide protest demanding that the King immediately hand over power to an all-party government, dismissing King Gyanendra's offer to hold election by April 2007. 

Nepal's long and porous border with India poses security concerns for the two countries

The King is also directing a difficult campaign against a Maoist guerilla movement in the countryside. 

Singh is a senior diplomat and is also related to King Gyanendra by marriage. India's foreign secretary Shyam Saran is also scheduled to accompany the special envoy. India has long expressed concern over the situation in Nepal, calling for a return to representative government. 

Speaking to a television news channel, Singh said "It is not our intention to interfere in the internal affairs of another country but the last thing that we would want is for Nepal to dissolve into chaos because India's vital security interests are involved. Our human interests are involved. There's an open border between Nepal and India and our commitment to parliamentary democracy is there."