NEPAL: Nepal yesterday rejected Maoist demands for a new constitution to define the role of the king, but agreed to include the rebels in an interim government to end violence that has killed thousands and wrecked its economy.
About 5,500 of the deaths came after peace talks collapsed late in 2001, after which Nepal deployed its 60,000-strong army for the first time to take on the estimated 15,000 guerrillas.
The revolt has scared away vital tourist dollars and wrecked Nepal's aid-dependent economy, pushing growth down to 2.4 per cent in 2002/03 from 6.1 per cent three years ago.
"We are ready to form an interim government by including the rebel side and also hold elections for the parliament," government negotiator Kamal Thapa told reporters.
But the rebels want an election to the assembly to prepare a new constitution to define the role of the king.
The government also agreed to meet key political parties and said the laying down of arms by the rebels must also be part of discussions in peace talks now under way.
"The demands raised by the Maoists can be addressed by amending the existing constitution and the government is ready to discuss with an open mind all possibilities," chief government negotiator Prakash Chandra Lohani said.
The Maoists said the government proposal was "quite disappointing" and lacked sincerity. "It is very unlikely the talks will lead to any fruitful end," chief rebel negotiator Babu Ram Bhattarai told reporters after the first 90-minute session.
The rebels' key political demand is for an interim government to oversee elections for an assembly to draft a new constitution to define the king's role.
But the government wants elections to a new parliament, which the rebels oppose.
Both sides said they would continue the talks and the second round is expected to begin later on Sunday and may go on for several days before a deal is hammered out, negotiators say.
The crucial talks are being held amid high security in Nepalgunj, 500km west of Kathmandu, in an area where the Maoists control large swathes of farmlands and forests.
Mr Bhattarai, however, said the rebels would not abandon the talks and would give the government time to reconsider its position but rejected the government demand for the rebels to give up their arms.
The meeting takes place amid fears of violence if talks break down. Sharpshooters have been posted in the bustling business centre in west Nepal, close to the border with India.
The Maoists have been fighting the government since 1996, but Mr Bhattarai recently acknowledged both sides had reached a strategic stalemate neither could win.
The United States, Britain and neighbouring India have supported the government against the rebels but have also pressed for talks to end the violence.