Nepal and China signed in Kathmandu on Thursday an agreement on resuming the bus service linking Nepal's capital Kathmandu and Lhasa, capital of southwest China's Tibet Autonomous Region.

The deal was signed by Ran Shiping, deputy director general of Tibet's Department of Communications and Khagendra Mani Pokharel, director general at Department of Transport Management of Nepal.

Under the deal, the Kathmandu-Lhasa bus service, which had been suspended since 2006 after it started on May 1, 2005, will be resumed at the beginning of the year 2008.

The bus service was opened in accordance with an agreement signed between China and Nepal in 1994.

According to the agreement signed following a six-day long meeting between a 10-member Chinese delegation and Nepali officials, both countries would operate one bus service a week from Jan. 1, 2008.

The number of bus service could be increased later as per mutual understanding. The Nepali side has given responsibility to Saajha Transport to operate bus services and make arrangement of the facilities to the passengers.

The bus fare for the three-day bus journey between Kathmandu and Lhasa has been fixed at 70 U.S. dollars per person.