Premier Girija Prasad Koirala made the call the day after rebels announced their decade-long armed struggle was over, and that they planned to join an interim government as well as take seats in parliament with Nepal's ruling parties.
"Despite my deteriorating health condition I took a political gamble in bringing the Maoists into the political mainstream," 85-year-old Koirala said.
"With this historic agreement I have been successful," said Koirala, who delivered his 10-minute address to parliament sitting down and had trouble catching his breath.
"I urge the Maoists to respect the letter and spirit of the agreement. I urge the Maoists to create a climate without fear," said Koirala, who played a key role in peace talks that led to the agreement.
The rebels have agreed to lock up their weapons under UN supervision, dismantle the governing structures they have set up in the large swathes of Nepal they already control and join a multi-party government by December 1.
The UN secretary general's personal representative in Nepal outlined the key role that the world body was planning to take.
"We met Thursday morning with (Maoist leader) Chairman Prachanda and deputy commanders of the PLA (People's Liberation Army) and began discussions with them on the practical aspects of cantonment and weapons storage," Ian Martin, Kofi Annan's representative in the peace process, said.
Under the deal, the 90,000-strong Nepal Army will be confined to barracks and will also put some of their weapons under UN supervision.
The UN had been invited by both sides to monitor the rebel weapons and army but they would have no enforcement role, Martin told reporters.
"If there are reports or allegations that weapons are elsewhere it will be our responsibility to investigate them," Martin said.
"Our commitment is to maintain confidence in the process by ensuring any breach of the agreement will be made known to the international community."
Jubilation at the deal, ending a bloody rebellion that has claimed more than 12,500 lives, was tempered by caution that much work remains to be done.
Annan said the UN planned to respond quickly to calls to assist in key areas of the peace process but urged both sides to "maintain the momentum of the peace process by fully carrying out the commitments they have made".
US State Department spokeswoman Nancy Beck said success depended on the implementation of the accord, and did not say if the Maoists would be removed from the US list of "terrorist" organisations.
Prachanda told a news conference late Wednesday the rebels had a "new vision" for Nepal.
"Our experiences have shown we could not achieve our goals through armed revolution, so we have chosen the path of negotiation and formed an alliance with the political parties," he said.
Koirala has also warned that "some reactionary forces are trying their best to foil peace negotiations".
He did not specify whom he meant, but the term has previously been used to refer to King Gyanendra, who was forced to renounce absolute power following massive street protests in April.
Under the agreement, the fate of the monarchy is to be decided after elections to a special assembly that will rewrite the constitution.
However, Prachanda gave an indication of the wrangling ahead when he said the Maoists would "accept the people's verdict but we will not accept monarchy".
While the Maoists insist they want a republic, others view the monarchy as important for the tiny country wedged between India and China.
Even if Gyanendra remains as monarch, he has already been reduced to a figurehead, stripped of his political powers and status as head of the army.

Copyright AFP (Agence France-Presse), 2006