(Updates with deaths, paragraphs 1-4) By Gopal Sharma KATHMANDU, Jan 22 (Reuters) - Police fired at anti-government protesters in Nepal on Monday, killing two, in violence that threatens to derail a peace process aimed at ending a decade of civil war. Ethnic Madhesi from the country's south, who are critical of a newly-passed interim constitution that brought Maoist rebels into the political mainstream, clashed with police, a home (interior) ministry official said. More than four dozen people were wounded, independent Kantipur FM radio said. Local officials said police fired in self-defence after being attacked by rioters in the southeastern town of Lahan, the focus of ethnic protests against the peace deal. Police said they opened fire after Madhesi protesters tried to storm a police station. One policeman was injured, they said. "First, we fired in the air, even then the crowd remained uncontrolled," a senior police officer, who declined to be named, told Reuters. "We had to open fire at the protesters after they tried to storm the police post." A 12-hour curfew has been imposed on Lahan, officials said. The last few days has seen the worst violence in Nepal since the Maoists joined parliament and starting locking up their weapons earlier this month in a peace deal ending an insurgency against the monarchy that has killed 13,000 people. The Madhesi Peoples Rights Forum, which has organised the anti-government protests, says the peace deal offers little for people living in the southern plains of the Terai, which is impoverished Nepal's bread basket. They want more jobs and funds from the central government. "The concerns of the people living in the Terai should be adequately addressed in the interim constitution," defence analyst Bishnu Raj Upreti said. "Otherwise, there is a risk of a serious conflict between the people from the hills and the plains." FOCUS OF VIOLENCE Lahan was the focus of weekend violence as Madhesi inhabitants torched government offices and buses after a Maoist activist shot dead a 16-year-old boy. Nepal's multi-party government ordered a high-level probe into the weekend violence that also sparked a transport strike by bus owners protesting a lack of security for their vehicles, officials said. Prime Minister Girija Prasad Koirala, leading politicians and former Maoist rebels held an emergency meeting on Monday and agreed to pay $14,000 in compensation to the family of the boy. The Maoists will formally express regret over the shooting, a joint statement issued after the meeting said. The government says forces opposed to the peace deal were conspiring to create the unrest. The Terai is a narrow, fertile strip of southern Nepal. It holds about half the country's population and many people have closer cultural links to nearby India than Nepal's highlands. Militants belonging to the Janatantrik Terai Liberation Front, who broke away from the main Maoists in 2004, have also separately launched a violent campaign in the troubled region. They are seeking autonomy for the area, saying people there should be allowed to run the army, police and local administration. "This could develop as a separatist movement if not properly addressed in time," said Upreti.
