1. (C) Parliament Spokesman Manohar Bhattarai told SCA/INS
Office Director Marcia Bernicat on October 12 that the U.S.
should aid the peace process by establishing informal
dialogue with the Maoists. He stressed that there were many
in Parliament, including himself, who agreed with the
Ambassador on the weapons issue. Bhattarai emphasized that,
while there were "sensible" Maoists who recognized the
importance of the U.S. role in Nepal, he agreed with Bernicat
that Maoist rhetoric continued to be full of contradictions.
While the Maoists had shown flexibility on a number of their
demands, they remained "very rigid" about arms. In response
to Bhattarai's assurance that Nepali Congress (NC) and United
Marxist-Leninist (UML) Party leaders would not let the
Maoists into the government armed, Bernicat underscored the
importance of this point to the U.S. government. Bhattarai
pointed out that, while Parliament's five year legal mandate
had lapsed long ago, it still held moral authority in the
eyes of the Nepali public. Bhattarai remained optimistic
about Maoist intentions in the peace process.

U.S. SHOULD "REACH OUT" TO THE MAOISTS


--------------------------





2. (C) Parliament Spokesman Joint Secretary Manohar
Bhattarai, noting that the views expressed were only his own,
recommended to visiting SCA India, Nepal, Sri Lanka, Bhutan
and the Maldives Office Director Marcia Bernicat on October
12 that the U.S. help "remove irritants" from the peace
process by reaching out to the Maoists indirectly, revealing
that the Norwegians had already begun to do so. Despite
recent press reports quoting parliamentarians criticizing the
Ambassador, many remained in parliament who were supportive
of the U.S. stance, including Joint Secretary Bhattarai.
Some Maoists, for example second-in-command Bhattarai, were
"sensible" and willing to join the mainstream by
participating in the peace process and taking on a
multi-party system. These more "sensible Maoists" had
publicly recognized the importance of Nepal's relationship
with the U.S., and were not willing to jeopardize it. When
Bernicat noted that the Maoists continued to be very critical
of the U.S. role in Nepal, Bhattarai stressed that, while
contradictions remained in Maoist policy, he believed the
Maoist position would become more pragmatic through dialogue
and negotiations.

WHAT IF THE MAOISTS TAKE OVER?


--------------------------





3. (C) Bernicat outlined a recent meeting in New Delhi with
a terrorism expert who had been highly critical of the peace
process, and had stressed that the Maoists were clearly
following Maoist doctrine and would sign whatever agreements

were necessary to come to power by peaceful means, only to
break them later. Bhattarai responded that this was one
school of thought, and could be true, but stated he believed
that the other parties in government would be able to contain
Maoist ambition. Society (the Nepalese people) simply would
"not accept" the imposition of Maoist policy in government,
he indicated, as the existence of liberal forces had taken
root in Nepal.



4. (C) Noting that the situation in Nepal had been far more
"hopeless" before the April democracy movement, Bhattarai
opined that the Maoists would continue to have "revelations"
as they were further exposed to the international community.
Up to now, he continued, the Maoists had put forward many
demands, but had also shown a willingness to negotiate. On
certain demands, however, the Maoists "remained rigid,"
including arms management. Bhattarai ventured that this was
because the Maoists believed the success of their insurgency,
in addition to their own safety, depended on arms. "Who
could forget Maoist atrocities over the last ten years?"
Bhattarai asked, implying retribution could ensue if Maoists
laid down their arms immediately.

"YOU CAN COME IN, BUT NOT WITH ARMS"


--------------------------





5. (C) General elections or a referendum, Bhattarai noted,
could not take place while there were people "roaming around
villages with guns." Nepalis living in fear would be easily
influenced to cast their vote a certain way, fearing Maoist
retribution. Outside of the arms issue, Maoists had shown
flexibility toward general agreements such as the composition
of the interim government, Bhattarai stated. The UML and NC
parties had remained steadfast in telling the Maoists, "you
can come in, but not with arms." Bernicat stated that the
U.S. government appreciated Parliament's approach and
Bhattarai's steadfastness on the arms issue.

PARLIAMENT: "LESS HANKY PANKY"


--------------------------





6. (C) Bernicat asked why the Nepali government was so
fearful of a breakdown in the latest round of peace talks.
What would be worse: to fight the Maoists and push them out
of the Kathmandu Valley, or to have the Maoists taint the
political process with arms? Bhattarai responded that there
"won't be a compromise on arms" with the Maoists, noting "we
will not let them in" otherwise. He indicated that
Parliament was well focused on the peace process and that
there was even "less hanky panky" (corruption) among
Parliamentarians than there had been in the past, as they did
not want to lose the opportunity to keep the Maoists from
returning to the jungle. Despite the expiration of its
mandate, the restored Parliament "had given life to the
government" and restored accountability in the eyes of the
average Nepali. Bhattarai emphasized that he remained
optimistic, but was not willing to give up everything to the
Maoists. "We are good guys," he concluded, "we must reform
them (the Maoists) and also make them good guys."

COMMENT


--------------------------





9. (C) While working with the Maoists to hammer out the
peace process, parliamentarians and politicians continue to
express confidence that the insurgents can be reasoned with.
Like Joint Secretary Bhattarai, many believe that the Maoists
will change their doctrine as they are increasingly exposed
to the international community and the day to day business of
governance. It is reassuring to see that there are those in
parliament who are categorical that no guns can be brought
into a democratic government, and that Nepal's democratic
society prefers an elected body, even one whose mandate has
technically expired. The recommendation that the USG begin
informal talks with the insurgents was echoed in a separate
discussion with diplomats, who argue that the international
community can play a role in helping to moderate the Maoists
if/when they join an interim government.



8. (U) SCA/INS Office Director Marcia Bernicat has cleared
this message.
DEAN