By Gopal Sharma KATHMANDU, Nov 8 (Reuters) - A midnight deal between Nepal's multi-party government and Maoist rebels to put guerrilla arms under U.N. supervision has raised hopes for lasting peace in a nation ravaged by years of conflict. The agreement put a smile on the face of many ordinary Nepalis, who have been forced to live with killings, abductions, fear and shortages as a war against the monarchy brutalised the poor Himalayan nation and wrecked its economy. "I still shiver from fear when I remember the days when the city used to turn into a ghost town due to rebel strikes. We could not even work to earn a living then," said Kumar Thapa, a Kathmandu taxi driver. "When I heard the news on radio the first thing that came to my mind was relief," he said on Wednesday, hours after the two sides clinched the deal. "Peace at last" read a banner headline in the English daily, the Himalayan Times. In May, the rebels and the government resumed peace talks after resuming a truce that collapsed in 2001 and then in 2003. But a dispute over disarming the rebel army had dogged progress. Tuesday's late night pact, agreed after two days of intense negotiations between Prime Minister Girija Prasad Koirala and Prachanda, has now cleared a key hurdle for the guerrillas to join an interim government. The deal includes a timetable for signing a formal peace agreement, the writing of an interim constitution and setting up a temporary parliament to include the Maoists. An interim administration with the rebels will be set up before December 1. The rebels will be restricted to 28 camps where cameras will be used to monitor arms. The king -- whose right to rule the impoverished kingdom was at the heart of the Maoist fight -- will remain as an almost powerless figurehead until the fate of the monarchy is decided next year. MAINTAINING UNITY, ENDING ABUSES Analysts welcomed the deal but said hurdles remained. "The main challenge is to maintain the unity in the ruling seven-party alliance to implement the deal because some of its constituents are not fully behind the pact," defence analyst Indrajit Rai told Reuters. "They could try and create some problems." Nepali daily Annapurna Post asked the rebels to be honest. "It is time for the Maoists to show more responsibility and accountability to implement the accord in letter and spirit," it said in an editorial. Diplomats and human rights groups have criticised the rebels for continuing extortions, intimidation and kidnappings despite a truce. The conflict, which began in 1996, has hit tourism in Nepal, home to eight of the world's 14 highest mountains including Mount Everest, and the birthplace of Lord Buddha, and badly damaged an already weak economy. No tourist has been killed so far but arrivals have fallen from a peak of about half a million in 1999 to 297,000 in 2003 and 277,000 last year. Many say this year has not been very good despite the ceasefire. "The deal will give a positive message to tourists," said Madhav Om Shrestha of the Hotel Association of Nepal. Lok Bahadur K.C., who owns a wayside restaurant in the western Maoist stronghold district of Rolpa, said he had seen many bodies of rebels and policemen killed in the conflict in the past. "That was a terrible scene. I hope those days are over now," he told Reuters by phone.
