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Last Updated: Wednesday, 9 August 2006, 12:00 GMT 13:00 UK
Breakthrough in Nepal arms talks
Maoist rebels in Nepal
The rebels and the government still disagree about the monarchy
The Nepalese government and Maoist rebels have reached agreement on the supervision of their weapons, an issue that has impeded their peace talks.

The United Nations will be asked to monitor both sides' arms, a joint statement issued in the capital, Kathmandu said.

Earlier this week, the rebels' deputy leader warned the talks could collapse over the future of the monarchy.

The rebels called a truce after King Gyanendra ended direct rule in April.

'Significant event'

The government has agreed that its troops will be confined to their barracks, while the rebels say their arms will be kept in one set of camps, the statement said.

It was issued after talks between Prime Minister Girija Prasad Koirala and Maoist leader Prachanda.

"It is a significant event in the peace process. We have been able to respond to the aspirations of people for peace and prosperity," the government's main negotiator, Home Minister Krishna Prasad Sitaula said.

For the rebels, negotiator Krishna Mahara was equally positive: "The agreement has decreased the mistrust and opened door to move ahead with the peace process."

Analysts say the deal could pave the way for the Maoists to join an interim government before a constituent assembly decides the country's future.

The Maoists and a seven-party alliance clinched a landmark power-sharing deal in June.

It followed a sustained campaign of street protests in April that culminated in King Gyanendra surrendering his powers.

But in recent weeks talks have stalled over the issues of arms and whether Nepal should continue to have a monarchy.

The Maoists favour a communist republic, while Prime Minister Koirala has been advocating a ceremonial role for the monarchy.

See the two sides shake hands on the agreement

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