The Maoist 'people's war' that began with khukuris and spears in a handful of mid-western districts five years ago is now the most serious threat to the monarchy and democracy. The Maoists now have modern weapons at their disposal and have spread to all the 75 districts of the country. Except for district headquarters, they now have effective control in 36 districts. In these districts government and administration are confined to the headquarters. They are rapidly gaining ground in another nine districts. At this rate the nine will also fall under their control in a few months, forcing the government to confine itself to the headquarters. Maoist sources say taking control of the headquarters won't be difficult if they are able to occupy the periphery. But they are not advancing just yet because maintaining control can be difficult.

It is learnt that the Maoists are using Manang district, believed to be a Nepali Congress stronghold, to smuggle weapons from Tibet. They have not intensified activities in the district, but plan to use it as a safe point to trade and transfer weapons. In recent years Tibet has become a big market for illegal arms. Maoist sources claim that Tibet is a safer, easier and cheaper alternative to India for smuggling weapons.

The districts where Maoists are strongest are Rolpa, Rukum, Salyan, Pyuthan, Jajarkot, Dailekh, Surkhet, Kalikot, Humla, Jumla, Dolpa, Achham, Bajura, Udaypur, Siraha, Bhojpur, Okhaldunga, Solukhumbu, Sindhuli, Ramechhap, Dolakha, Makwanpur, Rautahat, Bara, Kapilvastu, Arghakhachi, Gulmi, Kavre, Sindhupalchok, gorkha, Lamjung, Tanahu, Dhading, Parbat, Myagdi and Baglung. In these districts, government presence can be felt only near the highways and the the headquarters.

In addition to the 36 districts, Maoists have intensified their activities in Dang, Khotang, Sangkhuwasabha, Dhanusha, Palpa, Syangja, Mugu, Saptari and Nuwakot.