Rebels, Nepal army can merge

"The Maoist army and the Nepali Army could be merged before constituent assembly elections after the formation of the interim government through an interim constitution," the rebel leader told local journalists Friday at Dhangadi in western Nepal, state-run daily The Rising Nepal reported.

Prachanda, whose real name is Pushpa Kamal Dahal, also said that the issue of arms management could be achieved through discussions between the Maoists and the new government.

While not prepared to disarm, Maoist rebels said on Thursday they are willing to put their army and their weapons under the supervision of the United Nations to create a stable environment for the constituent assembly polls.

The two sides have been observing a ceasefire for nearly two months and have agreed to hold elections for a body that will rewrite Nepal's constitution, probably removing the king permanently from political life.

King Gyanendra relinquished direct rule in April and handed back power to parliament after mass protests against him.

He had sacked the government and assumed direct control in February 2005, in a widely criticised move, that he said was justified as political parties were corrupt and had failed to stem the decade-long bloody insurgency.