Angry crowds took to the streets in the country's remote west on Friday accusing police of protecting the person responsible for the brutal crime.
Police officer Krishna Raj Ojha told AFP that 17-year-old Sani Khuna was killed "in firing to contain the violent protest". An indefinite curfew has been imposed in the area, he added.
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Schoolgirl Nirmala Panta went missing in late July and her body was found the following day in a sugar-cane field.
Anger boiled over after police arrested a man who reportedly has severe learning difficulties and whom protesters say is a scapegoat allowing officers to shield the real culprit.
The victim's family have also accused police of failing to take action over her death.
"The state has not taken the cases of rape and violence against women seriously," woman's rights activist Hima Bista told AFP.
"Protection is being provided to the rape-accused time and again," she added.
Further rallies are planned for Saturday across Nepal, including in the capital Kathmandu where around 1,500 people staged a silent protest under a heavy police presence.
The hashtags #RageAgainstRape and #JusticeForNirmala were also trending on Twitter.
"The so-called democratic government couldn't give justice to the rape and murder victim instead they killed an innocent boy," Twitter user Sunel GC posted.
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There were 1,480 reported rapes in Nepal last year, according to recently released police data, almost double the number reported in 2016.
Activists say the rise is due to more women reporting violence to the police, but also say many more still go unreported in deeply patriarchal Nepal.
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