Nepal's rebel chief in Kathmandu to push peace talks

"Maoist chairman Prachanda and leader Baburam Bhattarai arrived in Kathmandu Saturday evening to engage in consultations regarding the peace process. They will stay in the capital for the next couple of days," Ananta, the central region rebel commander who uses just one name, told AFP.

The two sides agreed on a historic power-sharing in June that saw the rebel leader emerge from hiding after a decade to meet with Prime Minister Girija Prasad Koirala to create a framework to end an insurgency that has claimed more than 12,500 lives.

The eight-point deal includes drafting an interim constitution to allow the rebels to join the government and then elect a constituent assembly to rewrite the 1990 constitution, including a proposal to abolish or severely limit the role of the 250-year-old monarchy.

King Gyanendra, who sacked the government and seized power in February 2005, was forced to hand back control to an alliance of seven political parties in April after weeks of bloody protests.

Since then, the interim government has stripped him of all political authority including his control of the army.

A key sticking point however remains setting up a system of arms management for the army and the rebels, likely monitored by the United Nations, to create a conducive environment for constituent assembly elections.

The rebel leaders met with Madhav Kumar Nepal, general secretary of the Communist Party of Nepal-Unified Marxist Leninist and held discussions on political issues Sunday morning.

Discussions between Prachanda and Koirala were expected later this week, Sharma said.