CASUALTIES
According to IRIN and Reuters, an estimated 12,000 to 13,000 people have died from 1996 to 2006 (over 4,000 killed by Maoists and 8,200 by the government) and an estimated 100,000 to 200,000 people were internally displaced (Internal Displacement Monitoring Centre).

Read on internally displaced people

WEAPONS' SUPPLIERS (before 2007)
The government is armed by India, USA and UK. Its troops number today up to 95,000.
Since 9/11 the Anglo-American coalition has committed millions of euros in military aid in the name of the "world war against terrorism". China, Belgium, South Africa, Poland, Russia, Belarus, Ukraine and France also supply military support to the government. In 2005, following King Gyanendra’s coup both India and the UK suspended military aid to Nepal for a brief period of time but later both countries resumed arms shipments. The US also postponed the shipment of “lethal arms” to Nepal.

Guerrillas, who emerged in the mid-1990s out of a mix of state repression and poverty, numbered between about 5000 and 15,000. They produced their own arms and steal weapons from army barracks. Some of them were supposed to be trained by other self-declared Maoist armed groups such as the Naxalists in India and members of Shinning Path in Peru. It seems they received military assistance also from Kashmiri separatists and China.

Read on guerrilla warfare and arms industry

HISTORICAL BACKGROUND
One of the world's poorest countries, landlocked Nepal has been under the sway of an hereditary monarchy or ruling family for most of its known history, largely isolated from the rest of the world. With its ancient culture and the Himalayas as a backdrop, Nepal has long been the destination of choice for travellers in search of adventure.

Neolithic tools found in the Kathmandu Valley indicate that people have been living in the Himalayan region for at least 9,000 years. It appears that people who were probably of Tibeto-Burman ethnicity lived in Nepal 2,500 years ago.

Indo-Aryan tribes entered the valley around 1500 BC. Around 1000 BC, small kingdoms and confederations of clans arose. One of the princes of the Shakya confederation was Siddhartha Gautama (563–483 BC), who renounced his royalty to lead an ascetic life and came to be known as the Buddha ("the one who has awakened"). By 250 BC, the region came under the influence of the Mauryan empire of northern India, and later became a puppet state under the Gupta Dynasty in the 4th century. From the late 5th century, rulers called the Licchavis governed the area. The Licchavi dynasty went into decline in the late 8th century and was followed by a Newar era, from 879, although the extent of their control over the entire country is uncertain. By late 11th century, southern Nepal came under the influence of the Chalukya Empire of southern India. Under the Chalukyas, Nepal's religious establishment changed as the kings patronised Hinduism instead of the Buddhism prevailing at that time.

By the early 13th century, leaders were emerging in Nepal whose names ended with the Sanskrit suffix malla ("wrestler"). Initially their reign was marked by upheaval, but the kings consolidated their power over the next 200 years. By late 14th century much of the country began to come under a unified rule. This unity was short-lived: in 1482 the kingdom was carved into three – Kathmandu, Patan, and Bhadgaon – which had petty rivalry for centuries.

In 1765, the Gorkha ruler Prithvi Narayan Shah set out to unify the kingdoms, after first seeking arms and aid from Indian kings and buying the neutrality of bordering Indian kingdoms. After several bloody battles and sieges, he managed to unify Nepal three years later. However, the actual war never took place while conquering the Kathmandu Valley. In fact, it was during the Indra Jaatra, when all the valley citizens were celebrating the festival, Prithvi Narayan Shah with his troops captured the valley, virtually without any effort. This marked the birth of the modern nation of Nepal. A dispute and subsequent war with Tibet over control of mountain passes forced Nepal to retreat and pay heavy repatriations to China, who came to Tibet's rescue. Rivalry with the British East India Company over the annexation of minor states bordering Nepal eventually led to the brief but bloody Anglo-Nepalese War (1815–16), in which Nepal defended its present day borders but lost its territories west of the Kali River, including present day Uttarakhand state and several Punjab Hill States of present day Himachal Pradesh. The Treaty of Sugauli, signed on December 2, 1815, also ceded parts of the Terai and Sikkim to the Company in exchange for Nepalese autonomy.

Factionalism among the royal family led to instability after the war. In 1846, a discovered plot to overthrow Jang Bahadur, a fast-rising military leader by the reigning queen, led to the Kot Massacre. Armed clashes between military personnel and administrators loyal to the queen led to the execution of several hundred princes and chieftains around the country. Bahadur won and founded the Rana dynasty, leading to the Rana autocracy. The king was made a titular figure, and the post of Prime Minister was made powerful and hereditary. The Ranas were staunchly pro-British, and assisted the British during the Indian Rebellion of 1857, and later in both World Wars. In 1923 the United Kingdom, ruled by King George V of Windsor, formally signed with Nepal, ruled by King Tribhuvan Bir Bikram Shah, an agreement of friendship, in which Nepal's independence was recognised by the UK.

BACKGROUND TO THE CIVIL WAR (Read on civil war, communism and democracy)
In the late 1940s, emerging pro-democracy movements and political parties in Nepal were critical of the Rana autocracy and the hereditary rule by a small elite at the top of Nepal’s complex ethnic and caste-based social hierarchy. Meanwhile, Maoist China occupied Tibet in 1950, making India keen on stability in Nepal, to avoid an expansive military campaign.

On April 29, 1949, the Communist Party of Nepal (CPN) was founded in Calcutta, India. CPN was formed to struggle against the autocratic Rana regime, feudalism and imperialism. The founding general secretary was Pushpa Lal Shrestha.
CPN played an important role in 1951 uprising that overthrew the Rana regime and India sponsored Tribhuvan as Nepal's new king. A new government was appointed, mostly comprising the Nepali Congress Party. After years of power wrangling between the king and the government, the democratic experiment was dissolved in 1959, and a "partyless" Panchayat system was made to govern Nepal.

In ancient times, a Panchayat was a Nepalese public assembly, ideally comprised of the five (pancha) most important caste or occupational groups in the village. A pancha is a member of a panchayat. From 1962 until the 1990 constitution took effect, assemblies modeled on this ancient system formed the backbone of political structure in Nepal, at the village and district levels, and at the top in the National Panchayat, or Rashtriya Panchayat.

In 1989, the "Jan Andolan" (People's) pro-democracy Movement was marked by a unity between the various political parties. Not only did various Communist parties group together in the United Left Front, but they also cooperated with parties such as Nepali Congress. One result of this unity was the formation of the Communist Party of Nepal (Unified Marxist-Leninist). Jan Andolan eliminated the Panchayat system and forced King Birendra Bir Bikram Shah Dev, ruling the absolute monarchy of Nepal since 1972, to accept large-scale political reforms by creating a parliamentary monarchy, with the king as the head of state and a prime minister as the head of the government. A multiparty system was established in Nepali parliament in May 1991.
Expectations of increased human rights protections, stability and development came with the new political system. The King, formerly an absolute monarch, legalized political parties, after which an interim government promulgated a new Constitution by which the King was retaining important residual powers, but dissociated himself from direct day to day government activities. The democratically elected Parliament consisted of the House of Representatives (lower house) and the National Council (upper house).
Despite some improvements, however, there was little progress in bringing existing legal and administrative provisions fully in line with international standards and principles enshrined in the constitution which set up a parliamentary constitutional monarchy.

In 1994, the Communist Party of Nepal (Maoist) was founded and led by Pushpa Kamal Dahal, otherwise known as Prachanda. The CPN-M was formed following a split in the Communist Party of Nepal (Unity Centre) and it used the name "CPN (Unity Centre)" until 1995.

On February 13, 1996, the CPN-M alienated from mainstream political parties and started a guerrilla war in the Midwestern region of the country, the “People’s war”, against both monarchy and mainstream political parties, with the main goal of overthrowing feudal institutions, including the monarchy, and establishing a Maoist state.
The rebels were made up of former members of the 1949 Communist Party of Nepal. They were referred to as Maoists because they claimed an ideological legacy from the Chinese Revolutionary leader Mao Zedong.
The Maoists' main demand was an end to the monarchy. They also wanted the expulsion of all Indian influence and an end to discrimination based on the Hindu caste system, ethnicity and gender.

In 2002 fighting escalated dramatically as government and rebel forces launched frequent attacks which killed over 4,600 people, many of them civilians. About 50,000 Royal Nepal Army soldiers - some equipped with American-made M16s, others with Belgian FNFAL. 762 mm rifles – were opposing the Maoists, numbering between 5,000 and 15,000, widely dispersed in small groups.
Prime Minister Deuba was in turn removed by King Gyanendra, in October 2002, He dissolved Parliament and called for elections.

In 2003 a ceasefire between the government and Maoist rebels held for the first eight months of the year, leading to a decline in conflict-related deaths. However, due in part to the continued suspension of the democratically-elected government, the rebels withdrew from the ceasefire in August and both sides resumed fighting, resulting in the death of approximately 1,000 soldiers, rebels and civilians in less than five months. The Maoist rebellion had traditionally been concentrated in the four western districts of Rukum, Rolpa, Salyan and Jajarkot; however, in 2003 the rebels were active in 72 of Nepal’s 75 administrative districts.
Heavily criticized for human rights abuses, the Maoists were said to have imposed an increasingly authoritarian regime on many parts of rural Nepal, regularly abducting civilians and often forcing at least one person from each family to join them.

In 2004 mass strikes, riots, kidnappings, blockades, terrorist bombings and major clashes between Maoist rebels and government security forces contributed to the conflict, resulting in thousands of deaths. Thousands more were injured and hundreds of thousands remained displaced.
A government ambush of Maoists in March involved thousands of soldiers and resulted in hundreds of deaths. Rebels blockaded the capital of Kathmandu several times including a major blockade that almost entirely halted the flow of goods and people in and out of the city for several days. The King of Nepal controlled the government while opposition parties and donor agencies pushed for the restoration of democracy.
Maoist attacks on development and infrastructure projects resulted in millions of dollars in damages. Several big businesses in Nepal shut after facing threats from the rebels. Nepali royal family and American and Indian investors had stakes in some of the businesses targeted by the rebels, so India was also worried at increasing rebel attacks on Indian businesses in Nepal.
Nepal Prime Minister Deuba seeked Indian understanding, cooperation and assistance in tackling the deadly Maoist insurgency, called by him “terrorism”.
In the past, India had supplied Nepal with helicopters, trucks as well as arms and ammunition. Deuba also asked India to stop the Maoists from using Indian territory for shelter, training and supplies.

RECENT STATUS OF FIGHTING
In 2005, intense fighting between Maoist rebels and government troops throughout the year resulted in over 1,500 deaths on both sides. Human rights violations and the use of child soldiers by the rebels and the government continued. Thousands of people were arrested in a year-long crackdown by the government. On February 1, 2005, the King unilaterally declared a state of emergency, took over all executive powers of the government to establish an absolute monarchy, being in firm control of the military. He enforced martial law and argued that civil politicians were unfit to handle the Maoist insurgency. Telephone lines were cut and several high-profile political leaders were detained. Other opposition leaders fled to India and regrouped there. A broad alliance against the royal takeover called the Seven Party Alliance (SPA) was organized, encompassing about 90% of the seats in the old, dissolved parliament.

At the time, the government security forces consisted of the Armed Police Force and the Royal Nepalese Army, both having been heavily criticized for their alleged disregard for human rights. In three years the Royal Nepalese Army had nearly doubled its strength from roughly 45,000 troops to 80,000.

Violent local militias armed by the government were increasingly involved in violent attacks on suspected rebels and suspected sympathizers, while rebels controlled much of the countryside. Senior military officers said there were between 2,000 and 4,000 well-trained Maoist fighters, known as the movement's ‘hard core’. Another 12,000-14,000 so called ‘militia’ fight alongside them. In July 2006, a Maoist commander was quoted in local media as saying there were 36,000 fighters.
Though the rebels were active in 72 of Nepal’s 75 administrative districts, according to diplomats, they did not threaten the survival of the government, which was always controlling the major towns and cities.

In September 2005, fighting decreased following a four-month unilateral ceasefire declaration by the CPN-M which was not reciprocated by the royal government.
On November 22, 2005, a joint CPN-M / SPA conference in Delhi, India, issued a 12-point understanding in opposition to the monarchy. Within the framework of that understanding, Maoists committed themselves to multiparty democracy and freedom of speech. SPA, for their part, accepted the Maoist demand for elections to a Constituent Assembly. Maoist and SPA together arranged a mass uprising against the reign of King Gyanendra. Frustrated by lack of security, jobs and good governance, thousands of people took to the streets to demand that the king renounce power outright, but the royal government turned even more ferocious and continued its suppression including daytime curfews amid a Maoist blockade. Thousands were injured and 21 people died in the uprising. Food shortages took effect. The security forces turned brutal while foreign pressure continued to increase on King Gyanendra to surrender power.
These political agitations against the rule of King Gyanendra were called Loktantra Andolan (Democracy Movement), also sometimes referred to as Jana Andolan-II (People's Movement-II), implying it being a continuation of the 1990 Jana Andolan.

At the beginning of 2006, the situation became yet more tense as SPA launched agitation programmes around the country. On January 16, a night curfew was imposed in the capital, Kathmandu, to avoid demonstrations and strikes against the king. The police fired at protestors, and arrested many of them, including leaders of the opposition. The agitations reached a peak around the February 8 municipal elections, which were boycotted by the SPA and the Maoists. In total, official figures claimed a participation of about 21% but opposition sources questioned those claims.
SPA called for a four-day nationwide general strike between April 5-9, 2006. The Maoists called for a cease-fire in the Kathmandu valley. The general strike saw numerous protests. A curfew was announced by the government on April 8, with reported orders to shoot protestors on sight. Despite this, small, disorganized protests continued.
On April 9, SPA announced that it intended to continue its protests indefinitely and called for a tax boycott. The government announced plans to step up its enforcement of the curfew and claimed that the Maoists had infiltrated the protests. Prachanda, the leader of the CPN, had said that "this is no longer a protest by opposition parties ... it has become a people's movement," and warned that he himself could lead a revolt in the capital.

For four weeks, large pro-democracy demonstrations, general strikes and rebel blockades shut down the capital Kathmandu on multiple occasions. Clashes between security forces and thousands of anti-royalists occurred on a daily basis, with crowds increasing to sizes estimated at 100,000 to 200,000 in Kathmandu in various estimates, more than 10% of the city population. At least 16 people were shot dead, dozens were injured, and hundreds were arrested. Any offers for talks by King Gyanendra were rejected.

On April 21, 2006, a crowd extimated from 300,000 to about half a million took part in the protests in Kathmandu.
Later the same evening, King Gyanendra announced that he was giving up absolute power and that "Power was being returned to the People". He appointed former Prime Minister Girija Prasad Koirala of the Nepali Congress Party prime minister once more. Both the U.S. and India immediately called on the SPA to accept this new situation. Koirala formed a coalition called the People’s Government and annulled all appointments made by King Gyanendra since October 2002, with the intention to hold elections as soon as possible.
Many Nepalese protesters, however, still carried out rallies in numerous cities. Maoists stated that merely restoring the parliament was not going to resolve the problems and that the rebels planned to continue fighting against government forces until they would achieve the formation of a Constituent Assembly and the complete abolition of the monarchy. The SPA felt the pressure of these protests as some took place directly outside the deliberations of Gyanendra's offer.
Finally after 19 days of tumultuous protests, on April 24 midnight, the King reinstated the old Nepal House of Representatives and called it to reassemble on April 28. Then Maoists agreed to new Prime Minister Koirala’s appeal to lift city blockades and few days later a truce offered by the government came into force. On June 13, the government began releasing rebels detained under the antiterrorist law introduced in 1998.

The most dramatic move of the new government came on May 18, 2006 when the newly resumed House of Representatives unanimously used its newly acquired sovereign authority to curtail the power of the king and declared Nepal a secular state. Parliament stripped the king of his power over the military, abolished his title as the descendent of a Hindu God, and required royalty to pay taxes. Furthermore, several royal officials have been indicted, and the Nepalese government is no longer referred to as "His Majesty's Government", but rather as the "Government of Nepal". An election of the constituent assembly to rewrite the constitution was declared unanimously to be held in the near future, with the possible abolition of the monarchy as part of constitutional change.
The bill included:

Putting 90,000 troops in the hands of the parliament
Placing a tax on the royal family and its assets
Ending the Raj Parishad, a royal advisory council
Eliminating royal references from army and government titles
Declaring Nepal a secular country, not a Hindu Kingdom
Scrapping the king's position as the supreme commander of the Army

The act overrides the 1990 Constitution, written up following the Jana Andolan and has been described as a Nepalese Magna Carta. 
According to Prime Minister Koirala, "This proclamation represents the feelings of all the people."

May 18 has already been named Loktantrik Day (Democracy Day) by some.

Following Gyanendra's relinquishing of absolute power, the Nepalese government and CPN-M rebels agreed on a ceasefire.

In August 2006, both parties came to an agreement on the issue of arms accountability: the rebels and their arms were to be confined to camps while government troops would be stationed in their barracks. The U.N. was requested to monitor both. The UN Secretary-General decided to appoint Ian Martin ( United Kingdom) as his Personal Representative in Nepal for support to the peace process.
A lasting peace finally seemed within reach in early November when the two sides resolved the thorny issue of what the rebels would do with their weapons.
Under the pact, the Maoists agreed to put their arms under U.N. supervision, clearing a key hurdle for the guerrillas to join the interim government.
On November 21, 2006, peace talks ended with the signing of the Comprehensive Peace Accord (CPA) between Prime Minister Koirala and Maoist leader Prachanda.
This formally ended the Nepalese Civil War, which claimed more than 13,000 lives and displaced hundreds of thousands of people to avoid violence and abuse. At least 900 people disappeared after they were detained by the security forces while the CPN-M is responsible for several hundreds of killings, abductions and torture of people seen as opposed to their cause.

On January 14, 2007, SPA and CPN-M served together in an interim legislature under the new Interim Constitution of Nepal awaiting elections in June 2007 to a Constituent Assembly, while all the powers of the Nepali King were in abeyance. The new 330-seat parliament was sworn-in. The Maoists made up the second-biggest party in the new body with 83 seats.
The deal was widely viewed as a victory for peace and democracy in one of the world's poorest countries.  Analysts said their entry into their parliamentary system signalled their commitment to abandon their insurgency and participate in democratic politics.
Following the Comprehensive Peace Agreement, the United Nations received a request for assistance, and established the political mission United Nations Mission in Nepal (UNMIN) on 23 January 2007, to monitor the disarmament of Maoist rebels and sent an advance group of up to 35 military monitors and a team of up to 25 election experts to help with the 2007 poll for Constituent Assembly elections in 2007. Later the UNMIN included a team of 186 military monitors.

STATUS OF FIGHTING AT PRESENT DAY
An outbreak of violence in January 2007 cast a shadow over the peace process, as the Madhesi (or Madhesay) movement in the southern plains region called Terai demanded to end discrimination against the ethnic Madhesi people. Violent protests erupted at which Madhesi protestors called for greater representation in government and the peace process.  Clashes between police and demonstrators and attacks on government facilities in at least 10 districts resulted in the death of over 30 people and some towns were put under curfew.
A Nepali minister from the ethnic Madhesi community resigned, accusing the ruling alliance of neglecting Madhesi grievances. Madhesi leaders were angry after parliament passed the Interim Constitution that did not meet their demands for federalism and proportional representation.
They warned that, if the unrest continued, the military might intervene and wider communal conflict could break out, threatening the peace process. Aid agencies said the clashes and curfews were stopping people accessing health services, and called on those involved to allow humanitarian workers to operate freely.
Jwala Singh (real name Nagendra Paswan), leader of the breakaway Democratic Terai Liberation Front (in Nepali language Janatantrik Terai Mukti Morcha or JTMM), said he was ready for talks with the government. He also demanded the Madhesi to be allowed to run themselves the army, police and the local administration of Nepal's fertile southern plains bordering India. Prime Minister Koirala, in an address to the nation on February 7, 2007, promised to amend the constitution to meet the demands of the Terai people.

On January 2008, the state-owned Nepal Oil Corporation (NOC), which has a monopoly over oil imports, had increased kerosene, cooking gas and diesel prices by up to 20 percent. It was the second price rise since October. Nepal buys about 800,000 tonnes of oil annually, accounting for about 10 percent of its energy needs, but it faced shortages because of lack of money to pay for imports. NOC needed to raise the prices to cut its losses and attempt to minimise fuel shortages, but even to help pay bills worth millions of dollars to India's state-run Indian Oil Corporation (IOC), the sole supplier of oil to Nepal.
The move was greeted with nationwide protests from student activists which caused two days of disruption across the country. In Kathmandu, protesters had blocked many roads and blackened the sky by burning logs and tyres, till NOC withdraw the increase.