7-party alliance government and Maoists finally agreed on joint request for UN assistance in peace process, writing 9 August letter to UNSG Annan. UN responded by appointing OHCHR office head Ian Martin to lead new political mission to prepare assistance plan, including monitoring ceasefire, arms management and observation of constituent assembly elections. Controversy remained over king’s position in period before constituent assembly in place. Government and Maoists also failed to agree on interim constitution - due in June; incomplete draft only submitted 25 August. Serious disturbances over fuel-price hike forced government u-turn and highlighted fragile security situation. Maoist cadres clashed with People’s Democratic Tarai Liberation Front in Siraha District in southern Nepal 17 August; locals protested Maoist violence next day. 2 Nepali Congress Party cadres reportedly killed after kidnapped by Maoists 5 August. Outgoing army chief succeeded by his deputy despite allegations of serious human rights violations and royalist bias; draft Army Bill criticised domestically and internationally for violating human rights provisions.

Talks between 7-party government and Maoists progressed, despite ill health of PM G.P. Koirala, coordination problems within alliance, and claims of stalling on interim government formation from Maoists and civil society groups. Also differences on disarmament but Maoists held “very positive” meeting with UN assessment team for arms decommissioning 28 July: greater UN involvement a key Maoist demand. Maoists strongly objected to government’s 2 July unilateral request to UNSG Annan for UN arms “management”, insisting disarmament should also involve Nepalese army and won’t occur until full peace settlement and constituent assembly in place. Koirala stated constituent assembly election will be held by mid-April 2007.

Month saw some positive steps toward lasting peace but several fundamental problems still to be overcome. PM Koirala and Maoist chief Prachanda met 16 June. Koirala announced would dissolve parliament and form new interim government including Maoists. Mainstream parties signed 8- point agreement with Maoists reaffirming both sides’ commitment to multiparty democracy, arms supervision by UN and elections to constituent assembly. But process not yet clear and Prachanda reportedly retracted support for foreign supervision of arms. Harsh Maoist criticism of Nepalese Army also sparked controversy. Government scrapped contentious anti-terrorism laws and dropped cases against many detained Maoists; 190 rebels reportedly released. Parliament formally removed royal veto, reducing king to ceremonial monarch.

New government and Maoists met for first peace talks since 2003. Sides agreed to ceasefire and code of conduct which commits both to multi-party system, elections for constituent assembly and end to provocations. Talks due early June. Previously government dropped terrorism charges against Maoists and released hundreds from prison. Parliament voted unanimously to restrict royal powers 18 May, putting Nepal Army under control of parliament, calling for royal family to pay taxes, parliament to name heir to throne and country to be secular state - but did not abolish monarchy. 18 members of PM Girija Prasad Koirala’s cabinet named after intense internal debate. Government scrapped curbs on press freedom and NGOs, and set up panel to investigate excesses of royal government. 9 top security officials suspended, but not head of army. Major OHCHR report released 25 May, detailing torture, illegal detention and suspected mass murder carried out by former Royal Nepal Army in 2003.

After 19 days of mass anti-monarchy protests, King Gyanendra agreed to restore parliament for first time since its dissolution in 2002. Move came as king faced mounting pressure from mass protests despite government- imposed curfews and violent clampdown by security forces; at least 16 killed. 6 others killed by army in southeastern Nepal during protests over death of woman allegedly raped and shot by soldiers. Parliament convened 28 April, with veteran Nepali Congress head Girija Prasad Koirala as consensus PM. But several challenges remain, including building peace process with Maoist rebels, who declared 3-month ceasefire following king’s 24 April climbdown, and effecting constitutional change through new constituent assembly (to be now elected).

Widespread clashes between Maoists and security forces continued while government threatened clampdown. Escalation of violence feared ahead of 6-9 April planned demonstrations called by political parties and supported by Maoists. Maoist 6-day nationwide road blockade caused chaos while clashes with army included Palpa district clash 1 March where 31 killed. U.S. President Bush called on Maoists to end violence and urged King to reach out to political parties, while visiting Chinese delegation called for “reconciliation among constitutional forces”. 7-party alliance and Maoists held talks in Delhi to refine 12-point agreement. Tensions emerged within Maoist ranks as leadership criticised by central committee members. UN human rights commissioner in Nepal visited political detainees including CPN-UML leader M.K. Nepal; called detentions “illegal”.

Municipal elections boycotted by all major parties and criticised by UK, U.S., Japan and India as deeply flawed. Maoists supported boycott with armed campaign, targeting security forces and government buildings and killing 1 mayoral candidate. Royal Nepalese Army (RNA) launched offensive against Maoists in southwest, reportedly in response to deadly attacks in Palpa district. King’s power weakened by increasingly active judiciary: Supreme Court disbanded royalist anti-corruption commission, and ordered release of detained Nepali Congress Party spokesman. Former PM Deuba also released, along with 17 political leaders, but house arrest of CPN-UML leader M.K. Nepal extended by 2 months. UN High Commissioner for Human Rights released report on rights violations by RNA and Maoists and called for violators to be excluded from UN peacekeeping roles.

Political turmoil continued ahead of planned 8 February municipal elections. Major escalation in violence between security forces and Maoists left at least 90 dead. Royal government insisted vote will go ahead despite widespread resistance. Maoists and mainstream parties continued boycott call. EU called planned elections “another step backwards for democracy”, while former PM K.P. Bhattarai urged King Gyanendra to relinquish power and cooperate with parties. Assassination of royalist mayoral candidate Bijay Lal Das 23 January blamed on Maoists. Despite restrictions and house arrest of senior political leaders, mass protests held in Kathmandu 21 January, resulting in several hundred arrests. In significant move, China, having not previously engaged publicly, issued statement of concern over recent political developments and called for dialogue.

Fears as CrisisWatch went to press that Maoists’ 2 January announcement ending unilateral ceasefire could lead to escalated fighting. Maoists said move response to government’s refusal to reciprocate and enter serious talks. King Gyanendra reshuffled cabinet for third time since seizing direct power in February. Thousands defied ban on protests, called on king to give up absolute power. Alliance of 7 main political parties called for general strike in Kathmandu to protest 16 December killing of 12 civilians by soldier in Nagarkot town and vowed, along with Maoists, to disrupt municipal elections due 8 February 2006. UNSG Annan repeated call for bilateral ceasefire and offer of UN assistance in peace process; EU presidency supported call.

Landmark deal announced between 7 political parties and Maoist rebels 22 November: Maoists agreed to accept multi-party democracy, stop terrorising civilians and accept democratic process. Maoist chief Prachanda committed to “march ahead peacefully” into new political mainstream and work with political parties to end absolute powers of monarchy. Maoists’ 3-month unilateral ceasefire to end 2 December. 2 high-level Maoist commanders reportedly killed in 30 November aerial attack. India pressed King Gyanendra to restore multi-party democracy at South Asian regional summit Supreme Court refused to block law banning criticism of king and barring private radio stations broadcasting news; thousands protested new law. FM radio station that rebroadcasted BBC interview with Prachanda raided by government but reopened after Supreme Court intervention.