Nepal rebels, officials in race to seal peace deal

KATHMANDU, Oct 12 (Reuters) Negotiators struggled to seal a last-minute peace deal between Nepal's Maoist rebels and the government today, hours before their leaders were due to resume talks that are key to the troubled country's future.

Officials said the dialogue could be delayed or postponed if the negotiators failed to clinch an agreement ahead of the talks between Prime Minister Girija Prasad Koirala and Maoist chief Prachanda.

Koirala and Prachanda met on Sunday and Tuesday after peace moves stalled for months due to differences over disarming the rebel army and the future of the monarchy in the Himalayan nation.

Although the two sides were unable to settle the thorny dispute over whether the 35,000 guerrillas would lay down their arms before joining an interim administration, they remained upbeat after talks on Tuesday.

The two leaders also asked their junior negotiators to bridge the divide ahead of their meeting today.

Both sides held talks yesterday but were nowhere closer to an agreement, negotiators said.

''We have not been able to strike any deal yet on key political agenda,'' Maoist spokesman Krishna Bahadur Mahara told Reuters.

Ram Chandra Poudel, a top leader of Koirala's Nepali Congress party, said tosay's meeting between the two leaders could be postponed if there was no deal before 2 p m (0545 IST), when they are due to meet.

Political analysts were sceptical about the chances of a breakthrough.

''No settlement is likely to emerge on the contentious issues like the future of monarchy and arms management that require more intensive and detailed home work,'' political analyst C.K. Lal said.

The differences have dogged the peace process that started in May after King Gyanendra relinquished absolute power and restored democracy following weeks of often violent protests.

Both sides have been observing a ceasefire for more than five months and have agreed to confine their armies to camps or barracks under UN supervision during the constituent assembly elections they have agreed to hold by June 2007.

But some members of the ruling coalition say the rebels should disarm before joining the interim cabinet that will supervise the planned vote for the assembly that is to draft a new constitution.

The rebels also want the monarchy to be abolished or suspended before they join any interim government.

More than 13,000 people have died since the Maoists began an armed campaign in 1996 to turn Nepal into a communist state.

Talks with the rebels collapsed in 2001 and 2003 over the question of the monarchy.

REUTERS DKB RN1214