UPDATE ON NEPAL'S MAOIST INSURGENCY, AUGUST 16-22

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SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, AUGUST 16-22

REFERENCE: (A) KATHMANDU 1565
(B) KATHMANDU 1557

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


1. The Government of Nepal (GON) and the Maoist rebels
finally met for a third round of negotiations on August 17
in the southwestern city of Nepalgunj (Ref A). Tensions
reportedly were high, as the GON acceded to Maoist demands
for a roundtable conference and formation of an interim
government, but rejected the demand for a constituent
assembly. The Maoist leadership flayed the GON's reform
paper as totally unacceptable and as possibly signaling the
end of peace talks. The international community lauded the
continuation of dialogue and the GON's agenda, while the
political parties remained unsatisfied. Ambushes on
security forces by insurgents resulted in the deaths of
three policemen and nineteen insurgents. Six other security
personnel were also injured in clashes, three of which
occurred during the third round of negotiations. Maoist
contempt for civilians, as well as the ceasefire, continued
with the discovery of four bombs on a school playground,
allegedly meant for the American Embassy, the abduction of
eight people, and threats from a high-level Maoist of
strategic attacks throughout the Kathmandu Valley and
assassination of security officials. Maoists also
implemented new orders banning vehicles from entering the
far-western districts of Bahjang and Darchula, which lie on
the Indian border. The All Nepal National Independent
Student Union-Revolutionary (ANNISU-R),the Maoist
affiliated student organization, warned of civil war if
demands for constituent assembly were not fulfilled. End
Summary.

TENSIONS HIGH AMONG MUCH-AWAITED THIRD ROUND
--------------


2. The long awaited third round of peace negotiations was
held on August 17 in Nepalgunj, in the lowlands souththwest
of Kathmandu (Ref A). Chief GON negotiator Dr. Prakash
Chandra Lohani, Minister of Finance, and Kamal Thapa,
Minister of Information and Communication, met with Maoist
negotiators Baburam Bhattarai and Krishna Bahadur Mahara.
The GON presented its agenda, touted as a proposal for
"forward-looking reforms," that included input from members
of civil society, political parties, and human rights
activists. Both sides reportedly agreed to a six-point
agenda, which included political and social reforms as well
as rehabilitation for victims of the insurgency. The GON
conceded two key Maoist demands--a roundtable conference and
an interim government--but rejected the insurgents' demand
for a new constitution, arguing that any problems could be
solved "through amendments to the existing constitution."
After reaching an impasse, the talks were adjourned on
August 19, but Minister Thapa claimed they were "very
useful," and "there will be no breakdown in the cease-fire."


3. During the meetings, Chief Maoist negotiator Baburam
Bhattarai reportedly threatened to break off the talks after
the GON rejected outright the Maoist demand for a
constituent assembly. However, the Maoists notably have
failed to explain the rationale behind their rejection of
GON proposals. (Note: On August 16, prior to the third
round, Bhattarai had declared that the Maoists would not
accept any proposal for "mere reform" of the current
constitution, and ominously warned that any lack of
seriousness from the GON would "invite disastrous
consequences." End note). Bhattarai also blasted the GON's
request to place the issue of surrendering arms on the
agenda as "ridiculous." Following the adjournment of the
third round, Bhattarai said he doubted the peace talks would
be successful unless the GON revised its concept paper.


4. Maoist Supreme leader, Pushpa Kamal Dahal, alias
Prachanda, reportedly echoed Bhattarai's foreshadowing of
failure in a telephone interview on August 18, declaring
that the Maoists will not agree on "anything less than
constituent assembly." If the GON's concept paper is final,
he warned, then "everybody should know the talks have
failed."

INTERNATIONAL COMMUNITY PRAISES GON PROPOSALS
--------------


5. Despite Maoist criticisms of the GON's agenda, the
international community has praised the concept paper as "a
step forward" in finding a peaceful solution to the current
crisis. In addition to the USG, the United Kingdom, India
and representatives of civil society voiced support for the
proposals, calling them progressive and democratic. A press
release issued on August 18 by the United Kingdom hailed the
GON's concept paper as "a comprehensive position by the
Nepalese government," and said it was encouraged that social
and economic issues were being addressed. India's ambassador
to Nepal welcomed the GON's proposals as a "basis for future
understanding" between the two sides.


6. The Rastriya Prajatantra Party (RPP) also voiced
support, and the Nepal Teachers' Association issued a
statement on August 18 lauding the GON's agenda as "a
democratic proposal in every sense." The support and praise
of the GON's agenda would appear to put additional pressure
on the Maoists to be more compromising, instead of merely
concentrating on their own demands.


7. Both the GON and the Maoists have been under pressure to
make the peace talks successful. On August 16 in Nepalgunj,
a memorandum signed by over thirty organizations and
individuals was delivered to both the GON and the Maoists
urging success of the talks and warning of the heavy cost to
everyday people if they failed. A peace rally was also
organized on August 17 by sister organizations of the
Maoists to put pressure on both sides. Students, workers
and intellectuals affiliated with the Maoist party
reportedly all participated in the rally.

LEFTISTS STICK TO OLD MANTRAS
--------------


8. Despite apparent widespread support of the GON's concept
paper, the Communist Party of Nepal-United Marxist Leninist
(CPN-UML) has refused to endorse it, concentrating on its
own agenda against monarchial "regression," and promising to
continue its anti-government agitation until the "regressive
forces are completely uprooted." Madhav Kumar Nepal,
general secretary of CPN-UML, said the GON's agenda would
not solve the current crisis because it does not address the
issues raised by the agitating political parties. He
claimed the people would not accept the monarchy and accused
the King of trying to destroy democracy. Nepal also issued
an unusual challenge to the Maoists, declaring defiantly
that if the insurgents truly wanted fundamental change,
"they should join our joint movement against regression." A
statement issued on August 18 by the United Left Front (ULF)
also decried the GON's proposal and said it would not
resolve any of Nepal's political problems. Both parties
pledged to continue with their movements against the King.

SECURITY FORCES AND MAOISTS CLASH
--------------


9. As the third round of peace negotiations got underway in
the western part of Nepal, eastern districts saw three
violent clashes between security forces and Maoists. On
August 17, security forces reportedly were ambushed by a
group of armed Maoists in the eastern district of Ramechhap.
Security forces returned fire and killed five insurgents.
Later that day in the same region, a second clash ensued,
resulting in the deaths of twelve more insurgents. In a
separate battle, a policeman was killed and three others
injured in the northeastern district of Dolakha after
Maoists detonated pressure cooker bombs. Two policemen were
killed on August 19 in Siraha District, in the southeast,
when a large group of insurgents opened fire on them. On
that same day in the western district of Salyan, three
security personnel were injured in a clash with Maoist
cadres, and in the northeastern district of Taplejung, which
borders India and China, two Maoists were killed by security
forces during a clash. Security forces recovered explosives
from the scene. A report released on August 21 by the
Informal Sector Service Center (INSEC),a local human rights
group, claims that a total of 76 people have been killed in
armed clashes since the ceasefire was declared in January.


10. Maoist leaders in the east accused security forces of
"barbaric and cowardly murder," but Colonel Deepak Gurung,
Royal Nepal Army (RNA) spokesman, questioned the logic
behind Maoist ambushes, which he said was "baffling." The
insurgents reportedly are attacking army and police patrols
that venture beyond five kilometers of their barracks, which
the Maoists claim is a breach of the agreement allegedly
reached during the second round of talks.


11. Insurgents abducted a policeman on August 21 in Surkhet
District; he remains missing. Five policemen abducted last
week by insurgents (Ref B) were released on August 15.
According to police sources they were released on the
condition that Maoist cadres arrested in Khotang are
released and security forces stop alleged abuse of villagers
in that district. The insurgents threatened "dire
consequences" to the freed policemen and their families if
their demands were not fulfilled.

MAOISTS' ACTIONS SHOW DISREGARD FOR CIVILIANS
--------------


12. A vernacular newspaper reported on August 17 that,
according to a high-level Maoist, the insurgents are
prepared to launch attacks at places within the main cities,
including the Kathmandu Valley, if talks fail. Over one
thousand insurgents reportedly have been deployed to launch
attacks in Bhaktapur, Lalitpur and Kathmandu. The
publication also quotes the unnamed source as saying that
the insurgents have formed a special task force to carry out
high-profile assassinations of senior police and army
officials.


13. On August 15, members of the RNA defused four bombs
found on a playground of an elementary school in Kathmandu.
Two days later, a sister organization of the Maoists claimed
responsibility for planting the bombs. In a press statement
released on August 17, the organization said the bombs were
supposed to be planted at the compound of the American
Embassy because "the Americans are interfering in the
internal affairs" of Nepal, but were mistakenly planted at
the school.


14. Maoists abducted a total of eight civilians, including
a school principal and two CPN-UML party members. The CPN-
UML workers were abducted by the insurgents on August 20
from the central district of Dhading. On August 17, four
civilians were abducted in Sindhupalchowk, and on August 21,
two businessmen were kidnapped in Udayapur. There is no
information on the whereabouts of any of the missing.


15. Maoists in the far-western districts of Bahjang and
Darchula, which lie on the Indian border, have banned
vehicles from entering the districts. The insurgents are
protesting the alleged arrest of twelve of their cadres.

MAOISTS BECOME LANDLORDS
--------------


16. Maoists in the districts of Bardiya and Kailali, along
the western Terai, have seized land belonging to ex-
ministers and other government officials. The insurgents,
acting as landlords, employ farmers to work on the land, and
demand as a levy half of the crops that are produced. The
insurgents reportedly also have taken over parts of land
owned by local villagers who remain silent out of fear they
will lose the rest of their land. Maoists in the eastern
district of Siraha also reportedly confiscated land from
three landlords and claimed to have distributed it to
landless members of lower castes. However, no one has been
seen tilling it.

ANNISU-R THREATENS A CIVIL WAR
--------------


17. On August 16, the All Nepal National Independent
Student Union-Revolutionary (ANNISU-R),the Maoist-
affiliated student organization, reportedly said that the
constituent assembly is the "bottom line" for the Maoists,
and warned if the GON failed to agree to the demand, it
would "certainly lead the country to further civil war."
Himal Sharma, general secretary of ANNISU-R, said that the
Maoists had "statutorily given rights to revolt."

MALINOWSKI