Deadlocked Nepalese political parties have decided to seek more time to form a national unity government from President Ram Baran Yadav, who had set a deadline that expires on Sunday.

Narayan Kaji Shrestha, the Home Minister in the caretaker government, said the parties decided to request the president to extend the deadline by three days in order to hold further dialogue to form a consensus government.

They took a decision to this effect after a series of bilateral and multilateral talks between the three main political parties -- UCPN-Maoist, Nepali Congress and CPN-UML- and Joint Democratic Madhesi Front failed to bear any fruit, the Maoist leader said, hours ahead of the expiry of the August 21 deadline set by President Yadav.

President Yadav, during a meeting with the caretaker Prime Minister Jhala Nath Khanal, voiced concern over the development, including the delay in the constitution-drafting process.

"The President asked the caretaker Prime Minister regarding the progress in the peace process, constitution- drafting and government formation," Rajendra Dahal, Yadav's press adviser, said yesterday.

Nepal's two largest parties -- UCPN-Maoist and the main opposition Nepali Congress - have held several rounds of consultations to end the constitutional crisis in the country.

Maoists' Prime Ministerial candidate Baburam Bhattarai and Nepali Congress candidate Sher Bahadur Deuba also held talks with the CPN-UML, the third largest party and Terai-based Joint Democratic Madhesi Front (JDMF), a group of five Madhesi parties.

The Maoist have claimed the right to lead the government first as it was the largest party. Nepali Congress has underlined the need to form a government under its leadership as both the Maoist party and the CPN-UML have already led a coalition after the Constituent Assembly elections held in 2008 No party holds a majority of seats in parliament.

The UCPN-Maoist, which has 238 seats in the Constituent Assembly, is largest party in the Assembly, which acts as the country's interim Parliament.

The second largest Nepali Congress has 114 members in the House followed by CPN-UML, which has 108 members.

The United Democratic Madhesi Front (UDMF), which has over 60 lawmakers in Nepal's 601-member Constituent Assembly, can play crucial role in forming the government.

CPN-UML leader Khanal, who was elected Nepal Prime Minster on February 3 after 17 rounds of polls in Parliament, quit amid intense pressure from the Maoists and the Nepali Congress for failure to push forward the 2006 peace process.

Khanal on Sunday underlined the need for all parties to move ahead by forging a national consensus in order to conclude the peace process and to draft a new constitution for the country.

The caretaker prime minister said he had tendered his resignation as per the five-point deal to facilitate for formation of a national consensus government, not to form another majority government.

Integrating the 19,000 former Maoist guerrilla forces into the national army is one of the key sticking points in the stalled peace process, with military leaders and the Nepali Congress resisting the move.

The parliament, which was formed in 2008 after a popular election, has failed to fulfill its main function to draft a new constitution though its term was extended twice, the latest on May 29 which is set expire at the end this month.