UNCLAS SECTION 01 OF 04 KATHMANDU 001310

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, JULY 4-11

REFERENCE: KATHMANDU 0860


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


1. Informal talks proposed for July 11 between Nepal
Government and Maoist negotiators failed to materialize,
amid continuing controversy over the terms of agreements
allegedly reached during the second round of talks (Reftel).
As peace talks remain stalled, senior Maoists declared that
they are preparing for both talks and war. Sir Jeffrey
James, the British special envoy to Nepal, said his
government supports peace in Nepal, but also pledged
continued assistance to Nepal's security forces to counter
Maoist attacks. A former Maoist commander claims that
Maoists are "stretched to the limit," and are using anti-
American rhetoric as a means of securing their own refuge in
neighboring India. A weekly report issued on July 4 by the
Informal Sector Service Center (INSEC), a local human rights
organization, showed that 199 people have been abducted by
the Maoists since the declaration of the ceasefire on
January 29. Amnesty International (AI) claimed that the
Government of Nepal (GON) and the Maoists are not serious
about the peace negotiations. Maoist attacks on security
personnel and civilians continue, including the severe
beating of three civilians that killed one and injured two
others, and the obstruction of infrastructure projects.
According to the National Planning Commission (NPC), a
program that aims to enhance security and development
projects in Maoist affected districts will be expanded in
the next fiscal year. End Summary.

PROPOSED DATE PASSES WITHOUT TALKS
--------------


2. Despite attempts to bring representatives from the
Government of Nepal (GON) and Maoist negotiating teams to

the table on June 11, no such meeting occurred. Padma Ratna
Tuladhar, Maoist appointed peace talks facilitator, said on
July 8 that the GON and the Maoists would meet informally on
Friday, July 11. Tuladhar, speaking at the Reporter's Club,
said uncertainty remained over the implementation of
agreements allegedly reached during the second round of
negotiations (Reftel), but that both sides claimed they were
committed to peace. He also suggested that the King
intervene to initiate the third round, and allow Maoist
leaders to meet with him.


3. Representatives from the GON's and Maoists' negotiation
teams, however, reportedly did meet on July 3 for informal
talks. The GON was represented by Kamal Thapa, Minister of
Communications, and Dr. Prakash Chandra Lohani, Finance
Minister and GON team leader, while only two of the Maoists'
negotiating team members, Krishna Bahadur Mahara and Ram
Bahadur Thapa (alias Badal), represented the Maoists. Badal
reportedly demanded that the GON immediately implement
agreements regarding restricted deployment of the Royal
Nepal Army (RNA) allegedly reached during the second round
of talks. However, as Minister Thapa has said as recently
as July 4, all decisions reached during the second round
were not final.


4. The controversial issue of the army's restriction to a 5-
kilometer radius from its barracks seemingly remains a major
obstacle. The local press reports that the RNA remains
adamantly opposed to the idea, quoting an army official on
July 4 as saying that to implement it would be "surrendering
the very concept of national security." In addition,
security forces want several issues put on the agenda for
the third round of talks, including the return of looted
weapons by the Maoists.
MAOISTS PREPARED FOR WAR OR PEACE
--------------


5. Due to apparent skepticism regarding the future of the
peace negotiations, Maoist leaders are preparing for other
options. Badal, military chief of the Maoists, declared on
July 4 that the Maoists are preparing for both talks and
war. Speaking at the general convention of the All-Nepal
National Independent Students' Union-Revolutionary (ANNISU-
R), the Maoist affiliated student organization, Badal
claimed that security personnel are "unilaterally violating
the code of conduct," forcing the Maoists to prepare
themselves against any large-scale violence by the
government. (Note: Embassy has seen no evidence that the RNA
is violating the code of conduct in any systematic or
substantial way. End note).


6. Local Maoist commanders in the eastern district of
Khotang reportedly have changed tactics too, warning that
they are capable of carrying out operations on their own,
regardless of "higher orders" from Maoist leaders.
According to Maoist commanders in the district, security
personnel have resumed security operations and openly harass
Maoist cadres. The insurgents declared that they are
prepared to "face the problems on our own" and were ready
for any retaliation by security personnel. The district
administration denied the insurgents' claims, and said
security forces are on high alert only after the insurgents
extorted money from most of the government offices in the
district headquarters.

BRITISH ENVOY PLEDGES CONTINUED SUPPORT TO GON
-------------- -


7. In an interview on July 7 with the national news agency
of the GON, a senior official of the British Foreign and
Commonwealth Office said that his government wants to see
peace in Nepal and welcomes the sustained ceasefire. The
official also said that Sir Jeffrey James, the British
special envoy to Nepal, has affirmed his government's
commitment to providing training and other non-lethal
assistance to Nepal's security forces to counter any
resumption of hostilities. James reportedly warned against
the resumption of hostilities, declaring that it would have
a "devastating impact" on the lives of ordinary Nepalese.

INSIGHT OF AN EX-MAOIST
--------------


8. A July 10 op-ed written by a former Maoist for a weekly
English language newspaper claims that Maoists are
"stretched to the limit" trying to maintain the morale of
their cadres, and agreed to a ceasefire because of American
pressure on India to deny Maoist leaders refuge there.
Puskar Gautam, a former Maoist commander and present member
of the left-wing Communist Party of Nepal-United Marxist
Leninist (CPN-UML), claims that the Maoist leaders have
realized that the "people's war" is unacceptable to India
and impossible to sustain, and therefore, have adopted new
tactics. The Maoists reportedly are trying to present
themselves as a party dedicated to peace, and Gautam
speculates that the "Prachanda Path" is developing into a
multi-party peoples' movement because the insurgents need
assistance. Gautam claims that the Maoists' increased anti-
American rhetoric is an attempt to incite nationalism, alarm
security officials in Beijing and New Delhi, and ensure
refuge in India if peace negotiations fail.

ABDUCTIONS RAMPANT DURING CEASEFIRE
--------------


9. A weekly report issued on July 4 by the Informal Sector
Service Center (INSEC), a local human rights organization,
showed that 199 people have been abducted by Maoists since
the declaration of the ceasefire on January 29. The highest
number of victims, twenty-four, were taken from the far-
eastern district of Taplejung. The report states that
seventy-four people have been released, but 125 remain
missing. Representatives from INSEC told the Embassy that
they were unable to obtain information regarding whether or
not ransom had been paid to secure the release of those set
free.


10. The National Human Rights Commission (NHRC) has cited
concern over human rights violations by the Maoists,
particularly the abductions of political activists, and sent
a letter to the Maoists on July 10 calling for the immediate
release of abductees. NHRC also urged the Maoists to honor
their professed commitment to human rights.

AI CLAIMS GON AND MAOISTS "NOT SERIOUS"
--------------


11. Frustrated by failed attempts to meet with GON
representatives and Maoist negotiating team members, Ingrid
Massage, Deputy Director of the Asia-Pacific Regional
Program of Amnesty International (AI), said on July 6 that
neither the GON nor the Maoists was serious about human
rights. She expressed disappointment that representatives
from the GON and Maoists did not meet visiting AI
representatives. Massage also appealed to the public to put
pressure on both sides to sign a human rights agreement.

ATTACKS ON SECURITY PERSONNEL
--------------


12. A platoon commander of the Maoists was arrested on July
8 for allegedly attacking police personnel in Rautahat
District. In the far west district of Doti, five RNA
soldiers were wounded after being fired on by Maoists in a
confrontation on July 4. According to a press statement
issued by the Defense Ministry, the soldiers were attacked
while patrolling the area. On July 5 a Maoist activist in
custody in Accham District attempted to escape after
snatching a weapon from a soldier. Security personnel fired
on the insurgent as he fled.


13. A team of joint security forces destroyed a Maoist
training camp in Panchthar District on July 8. There were
no injuries reported as the insurgents had evacuated the
camp the prior week.


14. The local press reported on July 3 that Bangladesh
security agents seized a cache of ammunition and explosives
reportedly destined for use by Maoists throughout Nepal.
Over 90,000 bullets and almost two hundred kilograms of
explosives allegedly were seized from the homes of activists
from two of Bangladesh's prominent political parties.

MAOIST ATROCITIES CONTINUE
--------------


15. Maoist cadres continue to ignore the code of conduct by
abducting, assaulting and killing civilians. A district
committee secretary in Kalikot was physically assaulted in
public on July 6 and then abducted. According to local
villagers, the insurgents have threatened to kill him.
Three former Maoists who returned to their homes in Dhankuta
District after surrendering to the district administration
allegedly were tortured severely by Maoists. They
reportedly were abducted from their homes by armed Maoists
on July 4. On the same day insurgents beat a civilian to
death and severely injured two others in Kailali District.
The insurgents justified their actions by claiming they were
avenging the death of one of their cadres.


16. In the southwestern district of Dang, a Maoist
stronghold, insurgents reportedly have taken control of over
half a dozen government offices. According to local
villagers the insurgents are running the customs office and
collecting taxes. They also have taken control of forest
offices, animal check posts, health posts, and post offices.
Maoists reportedly are using some of the offices as shelter
after government workers fled the area in fear. (Note: The
Maoists launched a brutal attack on the police post of
Koilabas in the district on December 18, 2002 after which
there has been no security personnel in the area. End
note).


17. Maoists in Kailali District reportedly have halted the
construction of a bridge intended to facilitate travel
during monsoon season. The bridge has been constructed
during monsoon season for the past two years with the
financial assistance of private American citizens and local
funds. The insurgents declared that the bridge posed a
security threat to them.

SECURITY AND DEVELOPMENT PLAN UNDERWAY
--------------


18. The Integrated Security and Development Program (ISDP),
which aims to enhance security and development projects in
Maoist affected districts, will be expanded in the next
fiscal year, according to the National Planning Commission
(NCP). The program, currently implemented in Gorkha
District, will be expanded to include over twenty of the
most affected districts. The program has enjoyed some
success in Gorkha, where security has been enhanced,
government services restored, and various infrastructure
facilities repaired, including schools and hospitals.

MALINOWSKI