KATHMANDU -- Nepal's new Prime Minister Lokendra Bahadur Chand said on Saturday said his interim government will invite Maoist rebels to peace talks in a bid to end a revolt that has killed thousands and damaged the economy.

Illustrating the violence that has beset Nepal since the revolt began, suspected rebels detonated a bomb in the capital on Saturday, killing one person. It was the third blast in the capital in little more a week.

Chand said he wanted to hold the talks before fresh elections, originally set for next month. "We will open a window to have a dialogue with the Maoists," Chand told Reuters in an interview, his first after taking over as prime minister on Friday. "We want to hold early elections but it is not possible next month."

He said a formal decision to invite the Maoists would be taken after consultations with the interim cabinet and the end of a week-long festival that began Saturday.

Chand was appointed prime minister by King Gyanendra, who dismissed the previous prime minister and assumed power last week in a row over the timing of elections.

Gyanendra's decision to sack the previous prime minister and assume power plunged the Himalayan kingdom into fresh turmoil after last year's palace massacre in which most of the royal family died and as it battles an increasingly violent Maoist revolt.

More than 5,000 people have been killed in the insurgency aimed at establishing one-party communist rule in the world's only Hindu kingdom.

About 3,000 people have died since the rebels walked out of peace talks held last November and stepped up attacks against security forces and government installations.

The rebels stuck to their demand for a new constituent assembly to rewrite the Constitution and abolish monarchy, a demand rejected by the government, causing the talks to fail.

The rebels have since offered to hold talks several times but Chand's predecessor, Sher Bahadur Deuba, insisted they lay down their arms first.

The six-year-old rebellion has scared off tourists, hit growth and wrecked infrastructure in one of the world's most scenic but poorest nations.

"We will have to sit down and discuss our strategies and models to hold talks," Chand said when asked if his government would declare a truce and ask the Maoists give up the gun before talks. "I cannot set a time frame for elections. But the moment all the parties say that now the atmosphere is conducive to hold elections we'll go for elections."