Nepal's Government and the Maoist rebels have spoken positively of their first formal peace talks since a ceasefire was announced in January.
The rebels want King Gyanendra to quit
At a joint news conference after five hours of talks in the capital Kathmandu both sides described the atmosphere as "cordial" - but even so disagreements were evident.
The Maoist campaign for a communist republic in Nepal has claimed nearly 8,000 lives since 1996.
The Maoists presented a list of demands at the talks, including the release of jailed rebel supporters, a roundtable conference, an
interim government and a constituent assembly.
They also insisted on a deadline for reaching a peace agreement - but the government demurred, saying the process was too complicated and could not be rushed.
The two sides are to meet again at a date to be agreed later.
The Maoist view of Nepal's constitutional monarchy remained vague.
Previously they had directly called for the abolition of royal privilege and rule, but lately they have sounded more accommodating.
The government's position is that monarchy and democracy are not negotiable.
The six-member government team, led by Deputy Prime Minister Badri Prasad Mandal, met five rebel negotiators led by their second-in-command, Baburam Bhattarai, at a hotel near the royal palace in Kathmandu.
When they declared a ceasefire on 29 January both sides said they were willing to hold talks to end seven years of bloody insurgency.
The first round was originally planned to take place last week, but the talks were postponed over procedural differences.
Most of Nepal's political parties oppose the government and are not taking part in the talks.
They are preparing for a big campaign of protest against King Gyanendra because of his dismissal of the country's last elected government last October.
There have been riots and general strikes, and more are expected in the coming weeks.
As Nepalis hope for a successful peace process the paralysis of the political system is looming over these talks. It is all just adding to what was already a substantial challenge.