The ceasefire will take effect immediately, said Maoist rebels leader Prachanda in a statement sent to news organisations on Saturday.
The elusive leader said his fighters would not attack any government or civilians during the ceasefire but would defend their positions.
He said this would offer a chance to find peace in Nepal.
“Within this time the people’s liberation army under our control would only retaliate if they come under attack. There will be no offensive action from our side,” Prachanda, whose real name is Pushpa Kamal Dahal, said in the statement.
“It is the responsibility of the major political forces in the country to provide a political solution to the problems facing the country.”
Prachanda suggested there was a conspiracy to push Nepal towards becoming a failed state, prompting the rebels to take action to prevent the situation from deteriorating further.
Government officials were not available for comments on the statement or whether they would agree to the temporary truce.
Violence has escalated since King Gyanendra seized control of the government in February, a measure he said was necessary to quell an uprising that has left more than 11,500 dead.
Violence has escalated since King
The rebels claim to be inspired by Chinese communist revolutionary Mao Zedong, and have been fighting for nine years to topple Nepal‘s monarchy.
The rebels declared a ceasefire in 2001 and again earlier this year, but negotiations with the government failed both times.
The rebels have been insisting on an election for a special assembly which would draft a new constitution and even decide if the monarchy should be abolished.
The government, however, wants the fighters to give up their arms and join mainstream politics.