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Nepal's ultra-leftist rebels suspended a blockade of the capital Wednesday after the country's incoming prime minister assured them elections would be held for an assembly to frame a new constitution.

The rebels said they had lifted the blockade on Kathmandu and major towns until parliament meets for the first time in four years Friday, but they reiterated their key demand a new constitution and a review of the role of the monarchy.

"We have withdrawn our call for a blockade in response to an appeal from the Nepali Congress President Girija Prasad Koirala... until the first meeting of the parliament," ultra-leftist leader Prachanda said in a statement.

"We want to make it clear that if the first meeting of the parliament does not take a positive decision on the declaration of an unconditional constituent assembly, we will be compelled to reimpose the blockade."

Koirala is set to become Nepal's next prime minister after King Gyanendra handed over power to the country's main political parties in response to weeks of protests.

The veteran politician, four times prime minister and leader of the biggest party, had earlier appealed to the rebels to end their blockade.

"The constituent assembly is the main agenda of the new parliament," Koirala said in a statement Wednesday.

Life slowly returned to normal in Kathmandu after weeks of protests and a huge victory celebration on Tuesday after King Gyanendra reconvened the dissolved parliament.

Streets were crowded with tourists and shoppers and public transport was working.

"I am relieved, there is no trouble now, it is peaceful," said Raju Shahi, who had taken his taxi out of the garage for the first time in 17 days on Tuesday.

Political parties said their first priority would be to bring the rebels back into the mainstream and called for a ceasefire with the rebels who control vast swathes of the countryside.

Arjun Narsingh, a senior Nepalese Congress leader, said there must be a ceasefire, the rebels have to be involved in talks and elections should be called for a constituent assembly.

Analysts warned there were plenty of pitfalls ahead.

The rebels' demand for an unconditional constituent assembly is generally interpreted to mean it should have the power to strip the king of his title and establish a republic.

But an assembly on those terms is not something the king would be happy with, and could use the Supreme Court, dominated by royal appointees, to block.

It was also not clear if the rebels would agree to lay down their weapons before elections to the special assembly, something parliament is expected to demand.

On Tuesday, hundreds of thousands of people took to the streets of the capital waving party flags.

The rebels, however, called the deal between the king and the political parties a "sham" and said the parties had committed a "historic mistake."

(China Daily April 27, 2006)