Nepal has been under pressure from Beijing to seal off the world's highest peak for next month's stages of the relay, which has been hit by demonstrations against China's crackdown on protests in Tibet ahead of August's Games.
"The reason we have deployed police and army in Mount Everest is to secure the area for the Olympic torch and control any pro-Tibetan protests in the area," Home Ministry official Ekmani Nepal told AFP.
"There shouldn't be any 'anti-Chinese activities' in Nepali soil," he said. "The security personnel deployed in Camp II of Mount Everest could use force, including gunfire if need be, to prevent anti-China protests.
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He did not say whether the security forces would be authorised to shoot directly at protesters or just to fire warning shots.
The official said 25 police and soldiers, all trained mountaineers, have already reached Everest's Camp II, situated at 6,500 metres (21,300 feet) above sea level.
A Chinese team plans to take the torch to the top of the