Nepali Maoists to hold talks with top leaders of 8 parties next week

"We have agreed to hold high-level talks between the top leaders of eight parties next Friday," Prachanda told journalists as he left a talks session near the capital.

The rebels and new government have been observing a ceasefire for over two months and have agreed to draft a temporary constitution that will allow the rebels to join an interim government.

Prachanda, whose given name is Pushpa Kamal Dahal, and his second-in-command Baburam Bhattarai met with leaders Nepal's two largest parties, the Nepali Congress party and the Communist Party of Nepal (Unified Marxist-Leninist) for seven hours on Friday.

"There had been crisis of confidence among the seven-party government and the Maoists in the effective implementation of the eight-point agreement. Today's meeting sorted out the differences that had cropped up and rebuilt confidence," Bhattarai said as he left the meeting.

The leader of the NCP (UML), Nepal's second largest party, was equally upbeat about Friday's meeting.

"The meeting has created a favourable environment for putting the Maoist-seven parties deal in action without any disputes," said Madhav Kumar Nepal, general secretary of the CPN (UML).