It is a cold and lonely life for the 40 soldiers guarding the Kapurkot telecommunications tower here in mid-western Nepal. This windy hilltop at 2,000 m is also at a point where the Maoist-infested districts of Dang, Salyan and Rolpa meet. On 8 January, as part of their effort to target the country's telecommunication network Maoist rebels attacked the tower, but were repulsed and suffered significant losses. The army found 12 bodies in the area around the barracks. Nearby, villagers found two dozen more.

As they usually do, the Maoists attacked in a human wave. Not all of them were armed, and while preparing for the attack they chanted slogans, sang revolutionary songs and beat drums. They were hit by withering fire from army sentries on the hill. When a comrade was hit, an unarmed Maoist cadre would take up his weapon. In these remote mid-western hills, such tactics used to terrify locals, and the consequent fear was overwhelming. It is a measure of the Maoists' earlier confidence that they made no secret of an impending attack. Still, a demoralised police either abandoned their posts or cowered with their World War I vintage 303 rifles waiting for the devastating attacks.

The tables have now turned. Such psy-war tactics are not as effective with the Royal Nepal Army, and the Maoists have not been able to overrun a single army base after the surprise attack on the Ghorahi garrison on 23 November. As in Salleri on 26 November, the Maoists suffered heavy casualties in Kapurkot.

Infantryman Suresh Pun gave us this account of the attack: "It was 11 o'clock at night when we heard four gunshots and people shouting slogans. Our outpost is very isolated and situated on a hilltop. A fellow soldier on the watchtower had already seen them coming, and we started shooting at anyone who came near us. They came in droves-I guess they numbered over a thousand. There were only 36 of us. We just kept mowing them down, and after a few hours they gave up and fled. We found 12 bodies in our compound. My guess is that they suffered more than 200 casualties that night."

The Maoists have two cardinal rules of combat: never leave a weapon or a dead body of a comrade behind. So the fact that so many bodies were left behind was an indication of the rout they suffered both here and in Salleri. "I don't think they can stand up against the army," says Pun. "We are much better trained and have sophisticated weapons. We are also exposed to war situations when we go abroad as peacekeepers. Moreover, our morale is high. They made a bad decision when they thought they could scare us like they did the police." Even so, the army has been forced to withdraw from vulnerable telecom towers, and the Maoists have destroyed at least three towers in Myagdi, Nuwakot and in the far-west in the past two months, cutting of phone connections to many districts. There are also indications the Maoists have abandoned such frontal attacks on fixed positions and are concentrating on ambushing army patrols.

Over in Rolpa, the district headquarter of Libang has two faces. By day it looks like any other poor, remote mountain town in Nepal. By five in the evening everything shuts down, a palpable sense of nervousness grips the market. Even the dogs slink indoors. Maoists in the surrounding hills no more shoot in the air, set up bonfires and shout slogans on loudspeakers at night to intimidate the bazar. The army has now brought in its long-range howitzers that have a range of 5 km, so the Maoists have fled into the hinterland.

But Libang residents are still scared: the memory of the police crackdowns during Kilo Sierra Two in 1998 and Maoist brutality of recent years is still fresh in their minds. Fearing that they will once more be caught in the crossfire, most residents and political leaders have fled. But this has been made up for by the influx of refugees from outlying villages: people fleeing the fighting to the relative safety of Libang. The army barrack located above the town has given Libang residents a psychological boost, and a sense of security. But mindful of recent Maoist attacks on Rukumkot, Kalikot and Jumla they know that even here they are exposed. Today, you can still take a bus to Libang but it means submitting to the strictest security, and if you are not a Rolpali, it may be impossible to get through.

For ordinary people, life is hard as always but made harder by the fighting. Bhim Bahadur Magar walked nine hours from his home village to Libang to make his citizenship card. While waiting, he chatted with us in a tea shop. "There is no future here. I'm going to the Gulf to work. Earlier it was the police harassing us, these days it is Maoists," he said. "Now that the army is here, the situation has improved. But the army can't be everywhere at the same time."

In Libang, local officials tell me that hundreds of Maoists have surrendered. But by all accounts these are not the hardcore cadre. Most of the leaders have either fled the district, according to local sources, or have gone off to India. Beyond the reach of the army, the Maoists are still active in the remote villages. The army's main challenge here is logistics: even if they know where the Maoist hideouts are, it is difficult to get there. A local army commander sums it up: "In Rolpa, the Maoists are down but not out. But it's just a matter of time before they realise the only alternative is to come back to the negotiating table."

(Vijay Kumar is a television journalist and editor of the fortnightly magazine, Nepal. He is one of the first journalists allowed to visit the frontline in the army's counter-insurgency war.)