UPDATE ON NEPAL'S MAOIST INSURGENCY, JUNE 21-27

UNCLAS SECTION 01 OF 04 KATHMANDU 001212

SIPDIS

STATE FOR SA/INS AND DS/IP/NEA
STATE ALSO PLEASE PASS USAID/DCHA/OFDA
STATE ALSO PLEASE PASS PEACE CORPS HQ
USAID FOR ANE/AA GORDON WEST AND JIM BEVER
MANILA FOR USAID/DCHA/OFDA
LONDON FOR POL/GURNEY
TREASURY FOR GENERAL COUNSEL/DAUFHAUSER AND DAS JZARATE
TREASURY ALSO FOR OFAC/RNEWCOMB AND TASK FORCE ON TERRORIST
FINANCING
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN
NSC FOR MILLARD
SECDEF FOR OSD/ISA LILIENFELD

E.O. 12958: N/A
TAGS: PINS PTER CASC PGOV NP
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, JUNE 21-27

REFERENCE: KATHMANDU 1143

SUMMARY
--------------


1. The notable absence of Baburam Bhattarai, number two
leader and head of the Maoist negotiating team, has raised
speculation that the Maoist ideologue is once again out of
the country. Senior Maoist leaders continue to condemn
alleged US "interference" in Nepal. Uncertainty persists
over the next round of peace talks, with no date set for the
third round. The National Human Rights Commission (NHRC) is
awaiting a response from the Government of Nepal (GON) on
the draft it submitted to ensure adherence to the ceasefire.
Maoists held several rallies, including a massive one in
downtown Kathmandu. The insurgents reportedly forced
thousands of schoolchildren to attend. Maoists abducted
four civilians, including a Red Cross official, beat to
death a civilian, and seriously injured another. In a
separate incident, the insurgents brutally assaulted a
schoolteacher who refused to provide "donations," and took
control of a micro-hydro project after the managing operator
refused the insurgents' demands for money. Maoists
reportedly have threatened to cut off the hands and legs of
those who defy orders not to attend health camps conducted
by the RNA. The humanitarian outreach efforts by the RNA
reportedly have been highly successful. End summary.

BHATTARAI OUT OF SIGHT
--------------


2. Baburam Bhattarai, number two leader and head of the
Maoist negotiating team, has not been seen publicly for
several weeks. The Maoist ideologue, who has dominated the
press since coming out of hiding, has been
uncharacteristically silent. Peace talk facilitators
reportedly said that they had not been in contact with the
Maoist ideologue because he was out of Kathmandu. There is
speculation that Bhattarai is visiting neighboring India.

MAOISTS CONTINUE ANTI-US RHETORIC
--------------


3. Maoist leaders continued to condemn the United States.
On June 25 Krishna Bahadur Mahara, politburo member and
Maoist spokesman, decried the "increasing US interference"
in Nepal, and declared that the USG was "meddling in the
peace talks." Mahara, who conceded that the possibility of
American involvement drove the Maoists to the negotiating
table, claimed the USG was hatching a conspiracy from behind
the scenes to disrupt the peace talks. (Note: The local
press reported that during a June 18-20 visit to Nepal,
Lieutenant General James Campbell, Pacific Commander of the
US Army, assured Nepal of continued US financial and
political support in its battle against the Maoists. Senior-
level Maoists have been especially critical of the US
military presence in Nepal. End note.)


4. Ram Bahadur Thapa, alias Badal, Maoist military chief
and negotiating team member, also criticized the USG. On
June 20, speaking at a Maoist rally in Kathmandu, Badal
claimed that the United States was trying to disrupt the
peace talks, and lambasted the inclusion of the Maoists on a
US terrorist watch list.

UNCERTAINTY LOOMS OVER PEACE NEGOTIATIONS
--------------


5. Amid public pressure for continuity in the peace process
and charges of ceasefire violations, representatives from
the Government of Nepal's (GON) negotiating team and the
Maoist team still have not set a date for the next round of
peace negotiations. Prime Minister Thapa repeatedly has
said the third round would happen "soon," but has not
offered a timeframe. On June 25 Krishna Bahadur Mahara,
Maoist spokesman, accused the GON of delaying the
negotiations and demanded that the GON move forward honestly
with the peace process.


6. Despite the lack of a date for the third round, Prime
Minister Thapa has outlined an agenda for the fourth round.
Thapa said that the issue of the RNA's restriction to a 5-
kilometer radius around its barracks would be discussed in
the fourth round when the GON would give its official
position on the controversial issue. Krishna Bahadur
Mahara, Maoist spokesman and negotiating team member,
retorted that "there is no point in carrying on the talks"
if the GON does not send the army back to its barracks.

NHRC AWAITS RESPONSE FROM GON
--------------


7. The National Human Rights Commission (NHRC) has still
not received a response to the human rights accord draft it
presented to the Prime Minister on June 19. The NHRC has
criticized both the GON and the Maoists for not abiding by
the code of conduct, and the proposal calls for closer
monitoring of human rights violations and assurance of
availability of medical treatment, food supplies and
education. The Prime Minister said he was studying the
proposal.

MAOISTS HOLD "PEACE" RALLIES;
FORCE SCHOOLCHILDREN TO ATTEND
--------------


8. On June 20 the Maoists, along with the five major
political parties, held a massive rally in Kathmandu.
Krishna Bahadur Mahara, Maoist spokesman and negotiating
team member, addressed the crowd and said his party wanted
reform and permanent peace. However, the local press
reported that the majority of the attendees were
schoolchildren, some younger than ten years old, who were
forced to attend the rally. A teacher was quoted as saying
that the Maoists demanded the students attend the rally,
causing schools to shut down for half of the day. Other
schools declared the day a holiday so that the children
could stay at home and not be forced to attend the protest.


9. On June 23 Maoists staged another rally in the south
western district of Banke that blocked a major highway. The
insurgents formed a human chain protesting alleged United
States interference in Nepal, and also demanded the
immediate withdrawal of the Royal Nepal Army (RNA). In
Chitwan, Maoist cadres blocked roads throughout the district
for several hours, demanding that the GON bring peace
negotiations to a successful conclusion. The insurgents
also reiterated the Maoist demands for a round-table
conference, interim government and constituent assembly.

MAOISTS IGNORE CEASEFIRE
--------------


10. The Maoists continued to violate the ceasefire with the
abduction of civilians. Maoist cadres reportedly kidnapped
the President of the Red Cross Society in Kalikot District
and two other civilians on June 25. Their whereabouts are
unknown. In Taplejung District insurgents abducted an
employee of the transportation association on June 25 for
remarrying and imprisoned his new wife.


11. In Sarlahi District Maoists dragged two civilians from
their house on June 23 in the early morning and brutally
beat one of them to death and seriously injured the other.
Security forces in the area reportedly have said they will
not remain "mute spectators," warning that the insurgents
will face stiff action by the security forces. Maoists in
the region reportedly took responsibility for the murder,
but said the incident "could be an accident." Two young
children were killed by a bomb in Rukum District, a Maoist
stronghold. The bomb reportedly was hidden by insurgents
and exploded while the children were playing with it.


12. In another display of violence, on June 20 a group of
insurgents in Dolakha severely beat a schoolteacher after he
refused to give them money. According to the Society of
Maoist Displaced Teachers, a local association, Maoists have
killed nine teachers since the declaration of the ceasefire
and injured thirteen others. Many teachers are refusing to
return to schools outside district headquarters because of
inadequate security.


13. Maoists in Rukum District took control of a micro-hydro
project on June 24 after management refused to provide them
with several thousand dollars in "donations." Electricity
also reportedly has been disrupted in other parts of the
district due to the Maoists. According to the managing
director of the micro-hydro project, only five Village
Development Committees (VDC) out of forty-three have access
to electricity, and operations cannot continue without
adequate security.

MAOISTS ISSUE WARNINGS OVER HEALTH CAMPS
--------------


14. Maoists reportedly have threatened to cut off the hands
and legs of those who defy orders not to attend health camps
conducted by the RNA. According to press accounts, Maoist
cadres in the far-western regions have warned that attendees
of the camps would have their legs and hands chopped off
after the army leaves. As a result of the threats, it is
estimated that hundreds of people are being deprived of
medical treatment out of fear of retaliation by the
insurgents.


15. On June 21 seven armed Maoists reportedly were killed
by RNA personnel in the far-western district of Jajarkot
during an exchange of gunfire. The insurgents reportedly
opened fire on the convoy which was arriving to set up a
camp for medical and other services in the region (Reftel).
On June 26 a Maoist cadre was killed by army personnel in
Bhojpur District after attempting to disrupt assistance to a
school in the district.

RNA OUTREACH EFFORTS BRANDED A SUCCESS
--------------


16. The humanitarian assistance provided by the Royal Nepal
Army (RNA) has enjoyed significant success, despite
opposition from Maoists. According to figures published in
the local press, over 130,000 people in rural areas have
received some form of assistance, including medical and
veterinary treatment, agricultural training and citizenship
and passport services. In addition, over forty thousand
dollars in medicine was distributed free of charge. The
outreach efforts were aimed at some of the most remote
districts of Nepal, particularly those hit hardest by the
Maoist insurgency.


17. On June 24 the RNA held relief and health camps in
Jumla District, benefiting over 1400 people, and on June 23
RNA soldiers organized a health camp in Dailekh District,
providing medical examinations and distributing medicines,
and assistance with such administrative matters as
passports. Maoist cadres reportedly also received treatment
at the camp.

MALINOWSKI