Through April 2006, Nepal's primary counterterrorism focus remained the Maoist insurgency but the focus shifted dramatically after Nepal's political parties, the Maoists, and civil society led a popular uprising against the King. King Gyanendra was compelled to restore parliament and cede his authoritarian powers to a government run by an alliance of the seven main political parties. The Maoists declared a unilateral cease-fire on April 27. The government followed suit on May 3, formally lifting its designation of the Maoists as a terrorist organization. Months of negotiations resulted in a comprehensive peace agreement on November 21 that formally ended the insurgency. The agreement also provided that the Maoists would be admitted into an interim government once Maoist combatants were in camps and relinquished their weapons under UN monitoring.
From January to November, Maoist rebels were responsible for the deaths of 165 security personnel and 46 civilians. During the same time period, the government killed 182 suspected Maoist militants. Nepal's National Human Rights Commission (NHRC) reported that murders by Maoists lessened after the cease-fire in April, but still totaled 28 from May until November. Security force killings of Maoist insurgents were also significantly lower after the cease-fire, totaling nine during the same period.
Despite the cease-fire, Maoist rebels continued to conduct abductions, extortion, and violence. In the Kathmandu Valley, Maoists took advantage of their dramatically increased presence and the government's reluctance to upset the peace process to expand their use of extortion and efforts to undermine trade unions and student groups affiliated with the political parties. They also continued forced recruitment of schoolchildren, with thousands targeted after the signing of the initial November 8 peace accord. On September 20, and again on December 19, the Maoists declared nationwide transportation strikes. Both events were accompanied by the stoning of vehicles, and each lasted only for the declared period, demonstrating Maoist command and control.
This year also saw the beginning of a disturbing new trend with the activation of the separatist Maoist-splinter terrorist group called the Janatantrik Terai Mukti Morcha (JTMM), which aimed to bring about the secession of the southern Terai plains from the rest of Nepal. This group was responsible for the assassination of a Nepali Member of Parliament in September.
"Imperialist" United States and "expansionist" India were the targets of considerable Maoist venom, especially in the period leading up to the April uprising. A trip by Maoist Supremo Prachanda to New Delhi on November 18, however, seemed to mark the culmination of a shift in the Maoist view of Nepal's large neighbor to the south. At the end of the year, the United States was the only country to maintain its designation of the Maoist insurgency as a terrorist organization. Several countries, including India, were waiting for the Maoist entry into government to authorize open contacts at all levels.
The United States provided substantial antiterrorism assistance and training to Nepal's security forces, including courses on crisis management and critical incident management.