Police in Nepal have fired rubber bullets and tear gas as hundreds of people protested over a $500m (£368m) US grant going before parliament.
Nepal signed the Millennium Challenge Corporation pact to fund infrastructure projects in 2017 and it has been a bone of contention between the US and China.
Several people were injured in the demonstrations outside parliament in Kathmandu, reports BBC.
Protesters were also targeted with water cannon in an attempt to disperse Sunday’s demonstration. Police had stones thrown at them.
Parliament has until 28 February to ratify the deal, which has been delayed by divisions within political parties, including the ruling coalition.
Some of Prime Minister Sher Bahadur Deuba’s coalition partners including Maoist politicians, seen as traditionally close to China, have questioned the deal, according to the AFP news agency.
“Although they agreed to present the agreement in the parliament, it’s still not clear whether all coalition partners will cast their vote in favour… Our efforts will continue to convince them,” Prakash Sharan Mahat, spokesman for the ruling Nepali Congress party, told AFP.
Nepalese media has reported the US administration has held conversations with Nepali politicians urging them to endorse the pact by the end of the month or face the ties between the countries being reviewed. In response Chinese foreign ministry spokesman Wang Wenbin said such development co-operation should “come with no strings attached”.
The Millennium Challenge Corporation was created by the US Congress in 2004 and offers large grants to support economic growth and reduce poverty, according to Washington DC.