Volatile relations between government and ethnic groups worsened. At least 8 Karen rebels killed in clashes with military while pro-Yangon United Wa State Army reportedly attacked key positions held by rebel Shan State Army, heavy casualties expected though exact figures unknown. Exiled Shan leaders previously declared independence – move criticised by both ruling junta and Aung San Suu Kyi’s National League for Democracy. Junta denied NGO claims chemical weapons being used on Karen rebels. Aung San Suu Kyi remains under house arrest. Bomb in Mandalay killed 2, wounded 16, 27 April.

Promising diplomatic shift as Malaysia said would press for denial of Myanmar’s 2006 chairmanship of Association of Southeast Asian Nations (ASEAN) without concrete democracy moves. ASEAN's foreign ministers due to meet in Philippines 10 April. Delegation from rebel Karen National Union (KNU), largest ethnic armed group yet to sign ceasefire agreement with government, met military officials to plan talks. At least 100 intelligence officials under former PM Khin Nyunt found guilty on various charges after October 2004 purge. Suspects denied lawyers and media barred from trials.

National Convention to draft new constitution resumed 17 February with notable absentees: National League for Democracy (NLD) Vice-Chairman Tin Oo’s detention extended for another year under State Protection Law; 7 political activists from Shan political groups arrested 8/9 February; NLD leader Aung San Suu Kyi also remains under house arrest.

Karen National Union (KNU) army commander Mutu warned would resume armed struggle should negotiations with military junta not restart. Operations reportedly underway against northeast Indian separatist groups with camps in Myanmar: National Socialist Council of Nagaland (NSCN) claimed 5 cadre, 10 soldiers killed in 23 January attacks while Thai army reported clashes between Karenni National Progressive Party (KNPP) and Myanmar military near Thai border. Trials began 24 January of 300 people linked to Myanmar’s disbanded military intelligence unit. National convention to draft new constitution set to resume 17 February after 7-month hiatus.

National League for Democracy leader Aung San Suu Kyi’s conditions of house arrest reportedly deteriorated, leading UN Secretary-General Kofi Annan to issue statement of concern. Tsunami caused by 26 December Indian Ocean earthquake reportedly killed at least 90.

Military government released 500 of promised 9,300 prisoners wrongly imprisoned by disbanded military intelligence unit 25 November, including Min Ko Naing, now 42-year-old leader of student democracy protests suppressed in 1989. Out of total 500 only 38 were political detainees – though included senior members of opposition National League for Democracy (NLD). But NLD leader Aung San Suu Kyi and NLD deputy chairman Tin Oo remain under house arrest and little belief in region that any change of regime direction involved. Burmese army commenced operations to remove northeast Indian rebels from western frontier region of Sagaing and Kachin 30 November.

Chairman of military junta General Than Shwe further tightened grip on government with removal of PM Khin Nyunt and his reported arrest for corruption. Nyunt replaced by Lieutenant-General Soe Win, close ally of Than Shwe. Khin Nyunt had led ceasefire agreements with several ethnic rebel groups, including Karen National Union and United Wa State Army. National Convention remained adjourned, with National League for Democracy (NLD) leader Aung San Suu Kyi and NLD deputy chairman Tin Oo under continued house arrest.

Cabinet reshuffle strengthened General Than Shwe, chairman of military junta's State Peace and Development Council. Foreign Minister Win Aung replaced by inexperienced Major General Nyan Win. EU agreed to attend 8-9 October Asia-Europe meeting (ASEM) in Hanoi on condition Myanmar represented by low-level delegation. EU vowed sanctions if National League for Democracy (NLD) leader Aung San Suu Kyi not released and NLD given role in creating constitution. Suu Kyi and NLD deputy chairman Tin Oo remain under house arrest; constitutional assembly remains adjourned.

Constitutional assembly remained adjourned (since 7 July) with no indication from military government when this first step on “road map to democracy” would resume. National League for Democracy leader Aung San Suu Kyi and deputy chairman Tin Oo remain under house arrest. Debate continued as to whether Myanmar should join Asia-Europe Meeting (ASEM) summit scheduled for October in Vietnam. ASEM finance ministers’ meeting in July, and September gathering of group’s economy ministers, already cancelled after EU insistence.

Thailand called on Myanmar to attend second “Bangkok process” - multinational talks to discuss transition toward democracy. National League for Democracy leader Aung San Suu Kyi and deputy chairman Tin Oo remain under house arrest.