Nepal?s embattled government could open the way for talks with Maoist rebels if it declares a ceasefire, stops branding them as terrorists and withdraws international arrest warrants on them, a key intermediary said.

Padma Ratna Tuladhar, who brokered two previous rounds of peace talks, said it was up to the government to demonstrate good faith to bring the guerrillas to negotiations to end an eight-year-old conflict that has killed thousands of people.

?There is distrust on both sides,? the soft-spoken Tuladhar said in an interview in the book-lined study of his home in Kathmandu yesterday.

?But if the government were to call a ceasefire, remove the terrorist tag on the Maoists, they could be persuaded to come to the negotiating table,? he said. ?They have said they are prepared to be engaged in a dialogue process.?

A leading human rights activist, the 63-year-old Tuladhar is a communist by conviction, but is not part of any political group. He is respected by both the Maoists and the government for being fair and independent-minded. ?The government will have to do trust building if we are to have dialogue,? he said, in between fielding calls from people complaining of human rights violations.

The rebels, who are fighting to topple Nepal?s constitutional monarchy, showed their power by blockading Kathmandu for a week, choking off supplies to the capital?s 1.5 million people.

<B>Tougher measures</B>

Popular appeals spurred them to lift the blockade on Wednesday, but they warned of tougher measures if the government ignored their demands to release jailed guerrillas and probe the deaths of comrades they say were killed in fake gunbattles.

Tuladhar said early talks between the Maoists, estimated to control two-thirds of the Himalayan nation, and the government, were necessary to stop the rebels from stepping up the revolt.

?If the government fails to bring them to dialogue, war could be escalated soon. They may conclude that the government is not for a peaceful solution, they could carry out more attacks.? Nepal?s government has repeatedly called for talks with the guerrillas, saying that is the only way to end a conflict neither side could win.

But it has stressed unconditional talks and says the issues of a ceasefire and the dropping of arrest warrants against Maoist leaders could be considered once the dialogue begins.

Tuladhar said the Maoists also wanted the United Nations to broker a dialogue with the government, but that was not a pre-condition for starting talks.

Political experts and diplomats say one reason for the failure of two previous rounds of talks in 2001 and 2003 was that there was no independent player to monitor the ceasefire or act as a guarantor of any agreements the two sides reached.

<B>Sanjeev Miglani</B>