Against the backdrop of upheaval, aid-dependent Nepal's international donors will meet from Wednesday to decide the direction of funding for the Himalayan kingdom being pulled in three directions.

The donors will spend two days setting aid policy through 2006 for Nepal, where opposition parties are tussling with King Gyanendra in the capital and Maoist rebels are fighting to rid the countryside of Kathmandu's influence.

Foreign aid accounts for six percent of Nepal's Gross Domestic Product and a full 50 percent of the investment in development - a top priority of King Gyanendra who in 2002 took over the government saying parliamentary democracy had failed.

The opposition has brought out thousands of people to the streets for a month demanding a return to democracy and is flirting with negotiating with the king just as the delegates arrive.