The tension that erupted in Kaptangunj of Dewangunj Rural Municipality in Sunsari has also affected Biratnagar, the capital of Koshi province.
Amid fears of further unrest, Biratnagar's main market areas and schools remained closed since Tuesday morning. Operators of private schools said that they had decided on Monday to suspend classes for Tuesday.
Although the situation in the Kaptangunj area has gradually begun to calm, demonstrations have intensified along the East-West Highway, particularly between Pakali and the Koshi Barrage.
Protestors have completely blocked traffic by burning tires at several locations on the highway.
According to Deputy Superintendent of Police (DSP) Chandra Khadka, spokesperson for the District Police Office, Sunsari, the situation in the Dewangunj area is gradually returning to normal, but protests are continuing on the highway.
A large number of security personnel have been deployed in the area. However, the prolonged road blockade has left hundreds of passengers stranded.
Police have urged the public to remain cautious and avoid traveling until the situation returns to normal.
Expressing sorrow over the incidents that occurred on Sunday night and Monday afternoon, three local governments in Sunsari have appealed to residents to maintain social harmony.
Harinagar and Bhokraha Narsingh rural municipalities declared a local public holiday on Tuesday in mourning.
Harinagar Rural Municipality Chairman Gaffar Ansari said in a statement that the rural municipality office, ward offices, educational institutions, and all health facilities except those providing essential services would remain closed.
One person was killed and 22 others, including security personnel, were injured in the Dewangunj incident.