The talks have started, the truce is holding, and the Maoists are in a deep huddle here in Rolpa this week to plan out their future strategy. The party is at a crossroads: after six years of insurgency. It is dazzled by the prospect of being a legitimate political force and is preparing to come out in the open. But its leadership cannot just abandon the "peoples' war" that it was fighting and winning.

The meeting at Mirul village development committee, about a day's walk north from here, brings together the top leadership to take stock and analyse events since the underground party's second convention in February that launched the Prachanda Path doctrine-the royal massacre, the rise to power of Prime Minister Sher Bahadur Deuba, and Chairman Prachanda's meeting with mainstream left leaders in Siliguri, India.

Maoists leaders entered Rolpa through Dang avoiding the motorable road, and trekked through Holeri and Ghartigaon to Mirul. The rebels had hired three horses for their leaders. All senior Maoist party leaders and chiefs of front organisations are in Rolpa this week for the equivalent of a party plenum. They include Chairman Prachanda, Baburam Bhattarai and others in the seven-member Maoist high command, the entire politburo of up to 20 members and the 55-member Central Committee. District and regional military commanders and commissars were also ordered to march to Rolpa, as were the 11 members of the group's central advisory committee. The conclusions of the party plenum are expected to be announced on 9 September at a mass meeting in Libang organised by the above ground Maoist students' organisation.

The central committee last met in Siliguri in August to decide on the party's agenda for talks, including:

an interim government,

a new constitution, and

the institutionalisation of a republic.

At the same meeting the Maoists had decided to intensify the formation of village and district level "peoples' organisations", and also regional and central level cells. The other decision was to try to secure the support of all leftist parties to set up a republic. The peoples' organisation has expanded, but efforts in Siliguri to unify the left into one force faltered as all leftist parties except the Ekata Kendra balked.

This week's Mirul conclave will also serve to gauge the opinion of the Maoist cadre about negotiations, and possibly sell to a sceptical following the need to come out into the open. The Central Committee now says it is prepared for the minimum and the maximum that might come out of the talks-at the least a bourgeois republic (like in India), at most a people's republic (like in China). The plenum may even decide that the immediate goal would be to come above ground in a flexible interim set-up while keeping the long-term goal of a peoples' republic alive. Even Chairman Prachanda seems stumped by what he should call such a compromise, and has opted simply for "a new kind of political system."

"It is unusual for the high command to go to the larger party to get its decisions endorsed," a leftist analyst told us. "The decisions in Rolpa will show which way the talks with government will go." So far, gauging from the outcome at Godavari on 30 August, the mood is surprisingly conciliatory. Even a government source at the talks couldn't tell us whether the conciliatory mood was genuine or a ploy to buy time. "They did not directly say they wanted a new constitution, and even admitted the call for a republic was only a \'practical' bargaining position," he told us. Others have an even more convoluted explanation: that the talks are just a red herring for real negotiations going on at a higher level behind the scenes.

Whatever the case, Godavari seems to have been atmospherics. Neither side put its real cards on the table. The government's strategy is to stretch the ceasefire as long as possible and try to woo as many of the top Maoists as it can into open politics. The Maoists for their part are buying time to recruit, regroup, train and use mass meetings for a show of strength. The government and the Maoists both know public opinion is for peace and there will be a backlash against the first side to break off the talks.

They are also accelerating the setting up of peoples' committees and peoples' governments in districts neighbouring the Valley-following Mao's dictum of surrounding the cities from the countryside.

The question doing the rounds is: who are the Maoists' true backers? The Nepali media is awash with reports that it is either a section of the palace, or Indian intelligence, or both. Especially after Siliguri, leftist leaders have openly stated their belief that the Maoists are taking orders from their Indian handlers. Last week UML's Madhav Nepal told a meeting of Kathmandu's intelligentsia: India may be backing the Maoists in an attempt to keep Nepal under its "security umbrella."

Nepal says he suspects a "foreign hand" in the call for a republic to ensure long-term instability, although he does not explain how this would benefit India. Senior UML leader Ishwor Pokhrel was in Siliguri for the talks with Prachanda and says he cannot believe that the Indians don't know of the Maoist base in its sensitive "Chicken Neck" area. "There is reason to suspect that India may have pretended not to have noticed anything, hoping to use the Maoist card at some point in the future," he told us.

In Godavari, the Maoists had pressed for the next round of talks to be held in Rolpa to coincide with the mass meeting in Libang, a high profile event for which they have invited a throng of mediapersons. They want this to be a "reciprocal" visit to give the impression that the talks are being held between two "governments". Government has so far refused.

Independent leftist analyst Hari Roka doesn't have much confidence in the talks yielding any results. "These are fake talks," he told us. "The real talks should be between the palace and the Maoists. By giving up its command over the army the elected government has shown that it is just a pawn in this game."

Here in Libang, it is evident that some in the Maoist rank and file are itching to resume a war they thought was going well. "The leadership and the educated cadres seem positive about talks but the armed fighting forces feel their role will end with the talks," a senior police officer here told us. Some analysts doubt the rigid postures of both sides could ever be reconciled. "I don't see any point where the two sides could agree, a few more rounds of talks and we could head right back into war," says Govinda Neupane a former hardline communist and analyst.

The optimists see room for a settlement. The Maoists could give up the constituent assembly demand or the government could agree to a new constitution.

ML leader RK Mainali thinks the Maoists know that they cannot have a republic without support from the moderate left, which was why they met in Siliguri. "But the other communist parties think they will be dumped once Prachanda gets his republic," Mainali told us. "We believe the republic would be counterproductive and even put Nepali nationhood at risk."

Even here the Maoists are already talking about the mammoth rally they have planned in central Kathmandu on 21 September.

Meanwhile, extortion has again hit the capital's businesses as front organisations work to ferry and feed the 200,000 people they want to bring into the Valley. The government has asked Maoists not to have the rally. For the first time, Prime Minister Deuba has been uncharacteristically blunt in warning the Maoists against the rally, saying it might jeopardise the talks.

At a recent meeting of the National Security Council, the army brass also voiced its misgivings and discussed how it cannot tolerate matters getting out of hand on the streets of the capital. The Maoists say this is going to be a peaceful rally, and they do not want to provoke violence but have been calling its cadre to come out in force.