This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 KATHMANDU 001097 
 
SIPDIS 
 
STATE FOR SA/INS AND DS/IP/NEA 
STATE ALSO PLEASE PASS USAID/DCHA/OFDA 
STATE ALSO PLEASE PASS PEACE CORPS HQ 
USAID FOR ANE/AA GORDON WEST AND JIM BEVER 
MANILA FOR USAID/DCHA/OFDA 
LONDON FOR POL/RIEDEL 
TREASURY FOR GENERAL COUNSEL/DAUFHAUSER AND DAS JZARATE 
TREASURY ALSO FOR OFAC/RNEWCOMB AND TASK FORCE ON TERRORIST 
FINANCING 
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN 
 
E.O. 12958: N/A 
TAGS: PINS PTER CASC PGOV NP
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, JUNE 7-13 
 
REFERENCE:  KATHMANDU 1085 
 
SUMMARY 
------- 
 
¶1.  A date for the third round of peace talks remains 
elusive, as negotiations appear to take a back seat to the 
controversy surrounding the appointments of new cabinet 
members in the Government of Nepal (GON) (Reftel).  Senior- 
level Maoists have intensified public rhetoric about foreign 
interference in Nepal, particularly against the U.S.  Maoist 
cadres remain active, extorting food and money, abducting 
civilians, including students, and openly conducting 
military training and recruitment efforts.  The Royal Nepal 
Army (RNA) continues to provide humanitarian assistance to 
regions hit hardest by the insurgency.  Victims of the 
insurgency meanwhile have stepped up their demands to be 
heard, threatening to resort to violence if necessary. End 
Summary. 
 
PEACE TALKS REMAIN STALLED 
--------------------------- 
¶2.  No date has been set for the third round of peace talks 
amid the controversial change in Nepal's government 
(Reftel).  Baburam Bhattarai, senior Maoist leader and head 
of the Maoist negotiating team, however, reportedly declared 
on June 9 that his party would not abandon the talks.  In an 
earlier contradictory statement on June 8 Bhattarai 
reportedly said that the hopes for continued peace talks 
were diminishing due to "increasing activities of foreign 
powers."  The Maoist ideologue continued his double speak 
while addressing a program on June 12 attended by 
politicians in support of a new constitution.  Bhattarai 
threatened that his party would return to the jungle if the 
Maoist demand for a constituent assembly was not obtained, 
claiming that the King had undermined the existing 
Constitution by appointing his confidant as Prime Minister. 
STATUS OF GOVERNMENT'S TEAM UNCLEAR 
----------------------------------- 
¶3.  On June 12 the local press reported that a new two- 
member team of government negotiators had been formed.  Dr. 
Prakash Chandra Lohani, Minister of Finance, and Kamal 
Thapa, Minister of Communications, have been appointed 
government negotiators for peace talks with the Maoists. 
Minister Thapa told reporters that the GON will give top 
priority to peace talks.  He also said that while a leader 
of the government's team had not yet been appointed, he 
himself would "coordinate with the Maoists and start talks 
as soon as possible." 
MAOIST LEADERS SPEW ANTI-AMERICAN RHETORIC 
------------------------------------------ 
 
¶4.  According to a vernacular newspaper, Ram Bahadur Thapa, 
alias Badal, the Maoist military commander, declared on June 
10 that "this time war would be directly with the American 
army."  Badal, speaking at a meeting in Baglung District, 
threatened that the Americans would be defeated as they were 
in Vietnam, and asserted that America started war with the 
Maoists by placing them on a terrorist list.  The senior- 
level leader maintained that there was foreign influence 
behind the change of government.  Dev Gurung, a politburo 
member of the Maoist party, speaking in Palpa District on 
June 11, also reportedly lambasted the U.S. Army, claiming 
that over three hundred American military advisors were in 
Nepal training Royal Nepal Army (RNA) soldiers, with the 
intention of staging a military coup. 
 
CEASEFIRE NOT IMPEDING MAOISTS 
------------------------------ 
 
¶5.  Despite a four-month ceasefire, life in many parts of 
Nepal remains unchanged.  In the remote mid-western district 
of Baglung, residents remain skeptical about the prospect of 
peace.  Press accounts from the region report that the 
Maoists are very active.  The insurgents reportedly are 
openly conducting military training, distributing Maoist 
literature, and hanging Maoist flags throughout the 
district.  The insurgents also warn the villagers not to 
attend the medical camps conducted by the RNA.  Similar 
accounts have been reported from Palpa District as well, 
with reports indicating Maoists openly carry guns, and have 
severely beaten some residents. 
 
¶6.  Maoist cadres dressed in full combat uniform reportedly 
have intensified their extortion campaigns in Saylan 
District, forcing residents to "donate" food and money. 
They have targeted their exactions at teachers, merchants 
and other locals.  Reports from the region indicate that the 
insurgents have also banned development projects, and forced 
construction workers and technicians to desert a road 
project.  Maoist cadres abducted three members of the Nepal 
Reporter's Club in Kaski District on June 7, and also 
abducted a father and son from Pyuthan District on June 6. 
The insurgents reportedly took the father and son to be 
tried in a so-called Maoist peoples' court.  The All Nepal 
Independent Students' Union-Revolutionary (ANNISU-R), the 
Maoist affiliated student organization, reportedly abducted 
six teachers and a dozen students on June 5 in the western 
district of Dailekh.  The abductees remain missing. 
 
¶7.  A report published on June 10 by the Informal Service 
Sector, a local human rights organization, said the Maoists 
have abducted over a hundred and thirty civilians since the 
ceasefire was declared five months ago.  According to the 
report, fifteen people also have been killed over the past 
four months, and the Maoists were responsible for more than 
half of those murders.  The National Human Rights Commission 
(NHRC) has called on the Maoists and the GON to sign a human 
rights agreement to ensure that violations of the ceasefire 
stop.  The NHRC reportedly has sent a draft of the agreement 
to both negotiation teams, but has received no response. 
 
RNA EXPANDS HUMANITARIAN ASSISTANCE 
----------------------------------- 
 
¶8.  The Royal Nepal Army (RNA) continues its humanitarian 
assistance in regions hit hardest by the Maoist insurgency. 
The programs, which provide medical treatment and distribute 
basic necessities, have been highly successful.  As a 
result, the RNA has expanded the camps and joined with other 
government organizations in a bid to reach twenty-four of 
the most remote districts.  The RNA, along with the Armed 
Police Force (APF) and local government organizations, 
launched the new program on June 6 in the districts of 
Baglung and Palpa, where 16,000 people were expected to seek 
assistance. 
 
VICTIMS OF INSURGENCY THREATEN VIOLENCE 
--------------------------------------- 
 
¶9.  As victims come to grips with the hardships of 
displacement, loss of loved ones, and other atrocities 
resulting from the insurgency, they are also dealing with 
the perceived lack of attention to their demands.  Ganesh 
Chilwal, president of the Nepal Maoist Victims' Association, 
warned on June 10 that if the victims continued to be 
ignored by both the GON and the Maoists, they would resort 
to violence.  Chilwal said the victims would not attack 
"helpless villagers as the Maoists did," but would go after 
Maoist leaders like Baburam Bhattarai.  Chilwal claims the 
insurgents have murdered almost two dozen people since the 
ceasefire, and continue to rob and abduct innocent 
civilians.  The victims are demanding compensation for lost 
property, financial assistance for the families of murdered 
security personnel, scholarships for orphans, and assistance 
programs for widows. 
 
¶10.  An interaction was held on June 11 in Kalikot District 
between Maoists and victims of the insurgency in that 
region.  Many of the victims demanded that the insurgents 
return stolen items and leave the people alone to "lead a 
peaceful life."  In response to the victims' litany of 
complaints, which included being robbed, beaten, and 
abducted, and witnessing the murders of family members, 
Maoist leaders appeared to shrug off responsibility, 
declaring, "we did not force you to vacate your homes." 
 
¶11.  In another disturbing report, "Meet Nepal," a local non- 
governmental organization (NGO), states that over seventy- 
five thousand girls have been driven from their homes by the 
Maoist insurgency and are working in menial, low-paying 
jobs.  The girls, many of whom are illiterate and unskilled, 
flee their rural villages in search of better opportunities, 
but ultimately end up working in "cabin" restaurants in 
major cities, where prostitution is common.  The Kathmandu 
Valley reportedly has close to three thousand cabin and 
dance restaurants.  The NGO has started skill training 
workshops in hopes of educating the girls to enable them to 
secure respectable jobs. 
 
MAOIST PRISONERS RELEASED 
------------------------- 
 
¶12.  Seventeen Maoists detained in the Kapilavastu Jail 
under suspicion of being involved in terrorist activities 
were released on June 11 following orders from the Appellate 
Court. 
 
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