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 001353 
 
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/GURNEY 
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 
NSC FOR MILLARD 
SECDEF FOR OSD/ISA LILIENFELD 
 
E.O. 12958: N/A 
TAGS: PINS PTER CASC PGOV NP
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, JULY 12-18 
 
SUMMARY 
------- 
 
¶1.  The deadlock over peace talks between the Government of 
Nepal (GON) and the Maoists remains unresolved.  The GON has 
increased security in many districts throughout Nepal 
following reports of increased Maoist activities.  The local 
press reported on July 14 that Maoists are importing weapons 
from points along the Nepal-India border.  The GON, yielding 
to Maoist demands once again, released the three remaining 
Maoist Central Committee Members from prison on July 12.  On 
July 17 a team of security forces reportedly arrested 
fourteen Maoists who were armed and carrying explosives. 
Bharat Dhungana, head of the Maoists' office in Kathmandu, 
alleged that he was handcuffed and held for five hours by 
security forces on July 17.  Maoist disregard for the code 
of conduct continued, with the brazen abduction of two 
unarmed Royal Nepal Army (RNA) soldiers on July 9.  The 
insurgents reportedly also killed a district committee 
member of the Communist Party of Nepal-United Marxist 
Leninist (CPN-UML), and abducted five other civilians, 
including two youths and a police constable.  End Summary. 
 
THIRD ROUND OF TALKS REMAINS ELUSIVE 
------------------------------------ 
 
¶2.  The future of peace negotiations remains uncertain as 
Maoist leaders still have not responded to the formal letter 
from the GON inviting them to a third round of talks. 
Initial reports suggested that the Maoists would issue a 
response on July 17, but to date there has been no reply. 
Kamal Thapa, Minister for Communication and Information and 
government negotiating team member, reportedly sent a formal 
letter to Baburam Bhattarai, head of the Maoist negotiating 
team, on July 13.  Krishna Bahadur Mahara, Maoist spokesman, 
claimed on July 14 that he had no knowledge of the letter. 
However, the local press reported on July 17 that Maoist 
team members were meeting in the mid-western district of 
Bardiya to discuss the letter.  Security forces reportedly 
are suspicious of the apparent "closed-door" session and 
have speculated that a high command meeting was actually 
being held with Prachanda, Maoist chairman, and Bhattarai 
present as well.  Maoist cadres in the region have denied 
any knowledge of the whereabouts of the top two leaders. 
(Note:  Bhattarai continues to remain absent from the public 
spotlight, and speculation remains that he is in India.  End 
Note). 
 
¶3.  As the fragility of the peace process becomes more 
evident, concern over impending violence grows.  An article 
published on July 17 by a pro-monarchy weekly English 
language newspaper quotes a Maoist source as saying that the 
Maoists used the ceasefire to "reorganize their party," and 
are now equipped with "a good stock of arms."  The source 
further claims that not only are Maoist leaders using India 
as a safehaven, but are also receiving intelligence 
information from India's external intelligence agency, the 
Research and Analysis Wing (RAW). 
 
SECURITY STEPPED UP 
------------------- 
 
¶4.  The local press reported on July 15 that the GON is 
stepping up security due to what an army official called 
"suspicious activities" by Maoist cadres.  The unnamed 
source alleged that the insurgents have dramatically 
increased their movements, acquired more arms, and stepped 
up extortion demands.  The newspaper also quoted the army 
official as saying that the Maoist leaders have gone 
underground, and there was no way to "ensure that they will 
return to the talks table."  Armed Police Force (APF) 
personnel reportedly have resumed nighttime security 
patrols, and increased security checks along routes 
frequented by Maoists. 
 
¶5.  Amid speculation over the disappearance of Baburam 
Bhattarai, the GON has increased security in many of the mid- 
western districts, and imposed a curfew in the mid-western 
district of Dang, a Maoist stronghold and scene of a deadly 
attack on an army base in 2002.  The decision comes after 
reports that Bhattarai allegedly used an ambulance in Dang 
to facilitate the transport of arms and ammunition to 
Maoists in that region. 
 
¶6.  A curfew imposed by security personnel in the western 
district of Syangja will continue to be enforced despite 
objections from residents.  District officials said the 
curfew is necessary in light of continued security threats. 
 
MAOISTS TRANSPORTING ARMS 
------------------------- 
 
¶7.  The local press reported on July 14 that Maoists in the 
far western district of Kailali are importing weapons from 
points along the Nepal-India border.  According to security 
forces, the insurgents are working with the People's War 
Group (PWG) and the Maoist Communist Center (MCC), Indian 
extremist groups.  Papers linking the insurgents to the 
Indian Maoist groups reportedly were confiscated along with 
weapons and ammunition. 
 
¶8.  Maoists in Kavre, a district east of Kathmandu, 
reportedly have declared the region as a base.  According to 
July 11 press reports, Maoist cadres have sealed the borders 
of the district and do not allow new people to enter. 
Maoist cadres reportedly claim that they are preparing to 
fight a "people's war" against "imperialistic forces." 
 
MAOIST CENTRAL COMMITTEE MEMBERS RELEASED 
----------------------------------------- 
 
¶9.  In yet another concession to Maoist demands, the GON 
released the three remaining Maoist Central Committee 
Members from prison on July 12.  Maoists had demanded the 
release of all five of their Central Committee Members as a 
precondition of peace talks, but previously only two had 
been released.  The move is an apparent effort to entice the 
Maoists to return to the negotiating table for a third round 
of talks. 
 
¶10.  On July 17 Bharat Dhungana, the Secretary of the 
Maoists' office in Kathmandu, alleged that he was 
handcuffed, blindfolded and held for five hours by security 
forces.  Dhungana claims that five people in civilian 
clothes questioned him on the whereabouts of senior Maoist 
leaders, on their plans regarding participation in a third 
round of talks, and extortion demands by the insurgents. 
Dhungana said his "arrest" would hinder the return of Maoist 
leaders to the capital as they would be unsure of their own 
security.  On that same day, a team of security forces 
reportedly arrested fourteen armed Maoists, including four 
women, in Dolakha District while on routine patrol. 
Security forces confiscated explosives from the insurgents 
and militia uniforms. 
 
¶11.  On July 15 fourteen Maoist cadres were released from 
detention in Panchthar District. 
 
MAOISTS ABDUCT RNA SOLDIERS; 
VIOLATIONS CONTINUE TO RISE 
---------------------------- 
 
¶12.  Two unarmed RNA soldiers reportedly were abducted by 
Maoists on July 9 in Makwanpur District.  The Defense 
Ministry condemned the Maoists' action as "inhuman 
irresponsible behavior," and has demanded the immediate 
release of the soldiers. 
 
¶13.  A group of Maoists reportedly killed a district 
committee member of the Communist Party of Nepal-United 
Marxist Leninist (CPN-UML) on July 15 in Butwal District. 
The activist was returning home when the insurgents 
allegedly stabbed him to death. 
 
¶14.  Maoists reportedly abducted two youths on July 12 in 
Makwanpur District.  The youths were tied up and taken to an 
undisclosed location.  On July 13 the registrar of the 
District Soil Conservation Office in Gulmi District was 
abducted by insurgents.  On that same day in Jajarkot 
District, Maoists abducted a police constable and a Village 
Development Committee (VDC) secretary.  Both men remain 
missing. 
 
¶15.  Two powerful pipe bombs were found on the ground floor 
of a court in Siraha District on July 15.  The bombs are 
similar to those normally planted by Maoist insurgents 
during the insurgency, although no one has claimed 
responsibility. 
 
¶16.  Citizenship certificates distributed during RNA health 
camps, which Krishna Bahadur Mahara, Maoist spokesman, 
publicly condemned on July 14 as a ploy to disrupt talks, 
have been confiscated by Maoists in Banke District.  The 
insurgents, who have attempted to disrupt the health camps 
numerous times in the past, confiscated the cards after the 
RNA team departed. 
 
MALINOWSKI