KATHMANDU (AFP) - Buddhist monks halted traffic in Nepal's capital on Tuesday as they protested against a refusal to allow them to build a religious shrine in an area they say is an important holy site.

Authorities have rejected calls by the monks to allow them to install a five-metre Buddha statue and shrine in Kakrevihar in the Himalayan nation's southern plains, saying it is a protected forest area.

"This is the country where Buddha was born - let us erect the statue," hundreds of monks and their supporters shouted outside government offices, blocking traffic for two hours in Kathmandu's downtown, an AFP photographer said.

The Buddhists say they will stage bigger protests unless authorities in the Himalayan country back down.

Around 10 percent of the Hindu-majority nation of 26 million people is Buddhist.

"We plan to launch stronger protests if the government does not allow us to put up the Buddha statue," said Fupu Chemve Sherpa, vice president of the Nepal Buddhist Federation.

"We believe in peaceful protest" but "we have not been able to get satisfactory answers from the government on why they won't allow us to go ahead," Sherpa told AFP.

The monks are keen to install the shrine in Surkhet district as archeologists who excavated the region a decade ago found statues and inscriptions of Buddha.

Buddha, the founder of Buddhism, was born a prince in Lumbini, a village in Nepal's plains about 350 km (220 miles) west of Kathmandu more than 2,600 years ago.

After his enlightenment, Buddha is said to have devoted the rest of his life to teaching and he founded an order of monks before dying aged 80.