By Charles Haviland
BBC News, Kathmandu
Maoist rebel leader Prachanda is last known to have set foot in Kathmandu 25 years ago, when the Nepalese capital was a sleepy temple town and political parties were banned.
The Maoists continue to wield their weapons in public
Prachanda's return on Friday by helicopter was made possible by Nepal's political earthquake last April when King Gyanendra abandoned absolute rule after weeks of huge street protests.
But change is bringing its own questions.
The speed of transformation has been bewildering.
The restored parliament has removed the monarch's political powers, including his control of the army and his right to veto laws.
Parliament has taken on the power to decide the royal succession and has removed royal symbolism from the political system. The king, to date, has not resisted.
With a ceasefire in the 10-year conflict in place, the multi-party government has also made major concessions to the rebels.
The new government has released rebels from jail
Prachanda's talks in Kathmandu have resulted in both sides agreeing to dissolve parliament and to set up an interim government that will include the rebels.
The government has already released most of the 1,500-odd Maoist prisoners, removed their leaders' terrorist tag, and says it will scrap an anti-terrorism ordinance.
The Maoists have once more rallied in the capital; once-banned leaders are again walking the streets.
The Maoists can gain satisfaction from this, and from the government's acceptance of their own main political goal: an elected constituent assembly to write a new constitution.
Many unanswered questions remain, though.
A more long-term controversy concerns the future of the monarchy. Prime Minister GP Koirala pointedly said this week that he hoped a ceremonial monarchy would remain.
The Maoists fiercely reject this notion; even some of Mr Koirala's own party colleagues denounced his remark.
The future of the monarchy is still unclear
Weapons also present a thorny problem. Many Nepalis would like to see complete disarmament before the constituent assembly elections.
The Maoists and the government seem to have settled for the rebel and army weapons to be under international supervision.
Each side is already accusing the other of violating a recently signed code of conduct by continuing to wield weapons in public.
And violence continues, although on a much reduced scale.
The Maoists in particular are being accused of it.
Earlier this week, a schoolboy they admitted abducting near Kathmandu was found dead.
A respected human rights group recently concluded the rebels had also killed two brothers, kidnapped earlier. Army soldiers, meanwhile, were alleged to have beaten up ordinary people and Maoist party workers in remote western Nepal.
Jostling for power
Ten years of violence, indeed, is a legacy that cannot be overcome in a few days.
At the moment there is much talk of power structures, much political jostling for influential positions. There is less attention to confronting the violence of the past and trying to heal the wounds.
Such confrontation may be what the country needs.
The United Nations human rights office here recently reported that 49 people detained three years ago by the army had completely disappeared - and that was from just one barracks.
A task force has been formed to look into disappearances, and a colonel has been detained - but the army chief remains in place.
Conversely, Maoist cadres recently entered the southern village where Maoists blew up a bus last year, killing 38 people. A man chased them away with his crutch.
The political parties, too, have their own demons to confront. Some major army excesses took place when political leaders such as Mr Koirala were previously in power.
So far the loudest voice calling for some sort of truth and reconciliation commission has been that of UN High Commissioner for Human Rights Louise Arbour.
The constituent assembly is, of course, supposed to sort out all the political issues. Maoist leaders and army chiefs also insist that rights violations are low-level aberrations which will decrease as Nepalis put this conflict behind them.
And despite all the uncertainties, the atmosphere in Nepal is still more optimistic than it has been in years. Nothing is certain, but more and more observers say they cannot see the Maoists resuming their full-scale insurgency.