Nepal peace deal delayed, concerns remain

KATHMANDU, Nov 16 (Reuters) Nepal's government and Maoist rebels today failed to finalise a peace deal as promised, but pledged to sign the landmark accord, meant to bring an end to a decade-long insurgency, next week.

Earlier, rebel chief Pushpa Kamal Dahal, who goes by the nom de guerre Prachanda, told Reuters he believed in peace but could not rule out a return to armed struggle.

The comments drew swift condemnation from the United States, which said the Maoists would remain a terrorist organisation until they gave up their guns and ended violence.

Government and rebel negotiators said they hope to ink the peace deal by Tuesday, paving the way for the Maoists to join the interim government and for elections to a special assembly meant to draft a new constitution.

That in turn would satisfy the rebels' key demand, provided that the assembly abolished the centuries-old monarchy.

''We have a political agreement to change the socio-economic conditions in a peaceful way -- a peaceful transformation is possible now and armed conflict is going to be over,'' Prachanda said in an interview on a hilltop overlooking Kathmandu.

Prachanda, a bespectacled 51-year-old former school teacher with a salt and pepper moustache, said he was confident the peace process would not be derailed but it was too early to declare an end to a revolt that has cost more than 13,000 lives.

''If the old army and the old state will make a repression of our masses, if they will resort to any kind of violence against our masses, the right of resistance of the masses will be there,'' he said, speaking in reasonably fluent but accented English.

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