The near-simultaneous statements late Wednesday by Maoist leader Prachanda and the government announcing a ceasefire and negotiations has inspired hope among war-weary Nepalis that this may finally be the beginning of the end of a seven-year conflict that has cost more than 7,000 lives and ruined the nation.

The statements came after two days of intense speculation in Kathmandu that the royal-appointed Chand administration and the Maoists were nearing a compromise. On Tuesday night, the cabinet was in session till midnight while mediating ministers led by Lt Col Narayan Singh Pun acted as an emissary between Maoist leaders and the royal palace through the cabinet. Pun is also said to have brought the Maoist leaders to Kathmandu in one of his helicopters of Karnali Air.

The cabinet resumed its emergency session again at 9:30 am on Wedesday, and waited nervously all day for the Maoist response. The two sides were said to have agreed to make a joint statement, but the Maoist jumped the gun by first faxing Prachanda's short statement to the press. The government made its own announcement an hour-and-half later through radio and television. It appointed Lt Col Pun as "coordinator" of future negotiations.

"This is a major breakthrough, but there is a big challenge ahead now to make the ceasefire stick and carry on the negotiations," one senior government official told Nepali Times. He said the negotiations had been protracted and there had been a lot of give and take. "Till the last moment, we knew it could have gone either way," he said.

The Maoist statement says the group had agreed to the ceasefire after it heard from the government that it had acceded to its main demands: lifting the terrorist label, lifting the bounty on the capture dead or alive of key Maoists announced by the Deuba government, and scrapping a warrant by Interpol on senior Maoists. Both sides also issued a call to halt all offensive actions as they begin the peace process.

Immediate reaction from politicians were negative. The UML's Madhav Kumar Nepal in Jakapur for his party convention was reported by media as saying the dialogue process had not been "transparent". Nepali Congress leaders from both parties have not made any public statements yet, but privately they looked peeved that the wind had been taken out of their sails. Various human rights groups involved in last year's abortive talks and were kept out of this one (at the request of the Maoists, according to Pun) were also skeptical that the ceasefire would last.
Independent political analysts were cautiously optimistic. Most felt that there was finally the political will on both sides to take things towards a peaceful resolution, and they gave full praise to the two-month secret mediation process started by Narayan Singh Pun. There is some worry that like last year's truce, a ceasefire would not see a let-up in murders, extortion and plunder. The other pitfalls include hardline factions on both sides trying to sabotage future talks, or political parties who feel left out trying to wreck the peace process, or both sides refusing to compromise on their key positions.

Of these, the most immediate threat is of a militant faction of the Maoists breaking away and carrying on the conflict. Although some of the fear of that happening has been allayed by the fact that Lt Col Pun had involved Maoist military leader Ram Bahadur Thapa ("Comrade Badal") in the negotiation process.

What is intriguing is: if a ceasefire was so near, why were IGP Krishna Mohan Shrestha, his wife and bodyguard murdered on Sunday?

The Maoists have not officially claimed responsibility for the killings. There is speculation that either a rogue hardline element in the Maoist fold wanted to sabotage the secret talks, or that orders had already been given by the high command and it did not reach the assassins in time.

Either way, the fact that the secret talks remained on track despite the assassination of such a high profile leader indicates that there is unprecedented political will now on both sides to see this process through.