The two sides discussed the major demands put forth by the Joint Democratic Madhesi Front (JDMF), the main agitating group of the Terai region but no agreement was reached in the matter.
The government team was led by Forest Minister Mahesh Acharya.
"The government team did not appear serious on our demand," said Laxman Lal Karna, Vice-chairman of the Sadbhawana Party and one of the key members of the agitating group, told PTI.
"Our main demand is delineation of boundary," he said.
"They assured to form a commission to settle of boundary delineation, which we did not accept and the talks ended," he said.
Acharya said changes to the seven states can only be made by a commission that needs to be set up.
"The government or a party is not able to take such a decision right away on the state issue. It is a serious political matter," Acharya said.
Yesterday too, the talks ended without progress as the government representatives failed to present a clear roadmap to address agitating groups' demands.
More than 40 people have died in the agitations launched by the Madhesis - the Indian-origin inhabitants of Nepal's Terai region bordering India - and Tharu ethnic groups in southern plains, hitting hard normal life.
Meanwhile, police clashed with Madhesi cadres at the Belhiya checkpoint in Bhairahawa-Sunauli border today, injuring at least one protester.
The clash erupted after the agitating cadres of the Madhesi group pelted stones at the Nepal Police personnel, Home Ministry sources said. The agitators were trying to block the vehicles, including oil tankers, entering Nepal from India.
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