Nepal deal reached on arms, armies

The joint announcement followed a meeting between rebel leader Prachanda and Prime Minister Girija Prasad Koirala on the arms issue, which had threatened a three-month ceasefire.

The rebels would confine their soldiers and arms to camps in the countryside while the Nepal army would remain stationed in their barracks, while UN civilians would monitor both sides, they said in a statement.

"We have agreed on a UN letter asking assistance in monitoring and managing arms and armies of both sides," said Home Minister Krishna Prasad Sitaula.

The dispute over how arms would be monitored threatened to derail plans for elections next year for a constituent assembly that will write a new constitution expected to curb the powers of the king.

King Gyanendra seized absolute power from lawmakers in February 2005, saying the government had failed to do enough to deal with the rebel conflict, which has left an estimated 12,000 people dead.

But he has since been obliged to give up most of his powers.