Despite the posturing and hardline rhetoric, the government and Maoists are giving talks one more try next week. Public opinion for peace has given the negotiations momentum, neither side wants to be seen as wrecking it.

The truce is holding-no policemen or Maoists have been killed in two months. But in the countryside, elected village council chairmen are forced to resign, Maoist extortion and threats have intensified, schools across the country have been closed, those that haven't are subject to arson attacks. (See picture.)

Meanwhile the government is setting up a paramilitary force, arming it with automatic weapons, buying helicopters for the army and getting ready for a showdown should talks fail. There has been coordinated deployment of army and police in symbolic raids to confiscate arms and explosives in Kathmandu. The government is holding back for fear of derailing talks.

Government negotiator Narahari Acharya is confident that the Maoists will finally come out with their real demands next week. "They have to explain what is behind their republican curtain," Acharya told us. "Meanwhile, they are creating obstacles to the talks by threats and arson attacks."

Maoist negotiator Krishna Bahadur Mahara used a Press Chautari forum Thursday to accuse the government of using international tensions to crush his movement. "We respected the people's wishes and suspended the armed struggle. If the government does not respond, we will be forced to take up arms again."

Opposition UML leader KP Oli, is scornful of such bluster, and he dismissed talk of a republic. "This is just a slogan to keep their activists happy. But there is nothing stopping them on the real issue of constitutional reform. This is what the talks are for." Oli says the Maoists must analyse why their popularity has dropped so dramatically in the past month, adding it is due to their wanton threats, extortion and kidnappings after the talks began.

So why are the Maoists so keen to talk? They seem worried that the revolution is spinning out of control, the republican agenda is not going to work, and there is the real possibility of having to face the army. Then the UML exploited the Maoists' perceived Indian links after Prachanda's Siliguri meetings to isolate them, and forged a ten-party left alliance.

The Maoists now have to reconcile the need to come aboveground through talks with the demands of a radical cadre. "If the talks go too smoothly, there will surely be a split in the ranks," explained one Mao-watcher. A hardline faction led by Comrade Badal (Ram Bahadur Thapa) is said to be dissatisfied with the talks, but feels it can use the time to prepare to take on the army. Said the source: "The talks can fail, and fighting may break out again. They want to be sure they are prepared."

Leftist parties at an all-party meeting this week said they generally support the idea of giving the Maoists a slot in an interim government. The Nepali Congress will continue its meetings Friday to come out with its own response-a categorical "no" to a republic and a qualified "yes" to an interim government.