Nepal's Maoist cauldron draws foreign powers closer

DHULIKHEL, Nepal, Aug 18 (Reuters) - The lights go off early and the doors are bolted in Bishwo Shrestha's deserted guest lodge, barely an hour out of Nepal's capital, which boasts some of the most stunning views of the Himalayas.

Shrestha, 42, is terrified that Maoist guerrillas seeking to impose communist rule in one of the world's poorest countries will pay him a visit, demanding money or maybe even taking his 14-year-old son away to fight for them.

Nepal's Maoists have taken control of about two-thirds of the country in their seven-year insurgency, stoking unease not only in neighbouring India and China but also in Washington that it is turning into a failed state.

Government ministers talk of the possibility openly, raising fears that Nepal could become a haven for Islamic militant groups such as al Qaeda, on the run from Afghanistan and Pakistan.

"The last thing we want to see is another hot spot in the world, another unstable country," said a U.S. official speaking in Nepal. "The nest of the al Qaeda is broken. All the birds are up in the air looking for a new home."

"And a country in turmoil, where there is violence going on, could easily provide haven for some of the international terrorist elements to slip in," the official said.

So far Nepali authorities have reported no al Qaeda presence in the remote mountain nation of 23 million people, though the United States has included Maoists on its list of what it calls "terrorist groups".

The Maoists, who take their inspiration from Peru's Shining Path guerrillas, strongly object to being branded "terrorists".

They say they are running a political movement and have nothing to do with al Qaeda or Afghanistan's former Taliban rulers.

CONVERGING INTERESTS

Last month the Maoists agreed to resume peace talks stalled since May. But they have won little international support and instead find themselves ranged against such diverse nations as India, China, the United States and Britain.

"The wind is blowing into the face of such revolutionary movements. All these countries view tackling the Maoists as part of the anti-terrorist struggle," said a Western diplomat.

"In the post 9-11 world , the geopolitical interests of these three powers -- India, China and the United States -- have actually converged with regard to Nepal," said Kunda Dixit, editor of the Nepali Times.

India has emerged as the largest donor of military equipment -- including helicopters, guns and ammunition -- to the 55,000-strong Royal Nepal Army (RNA).

It has trained Nepali army officers in counter-insurgency schools in India and cracked down on Maoist and other leftist groups operating within India.

China also denounced the Maoists.

"The Chinese are deeply embarrassed by the Maoists," the diplomat said. "They don't see them as Maoists. They are, in any case, still to come to terms with their own Maoist past."

WILD CARD

The United States held exercises with the Nepali army in January and last year Congress approved $12 million to train officers and supply 5,000 M-16 rifles.

U.S. embassy spokeswoman Constance Colding Jones denied charges by Maoists that hundreds of U.S. military advisers were on the ground helping the RNA. "There are no advisers. They are embassy personnel, a military attache, a military liaison officer, like anywhere else in the world," she said.

But she said Nepal was certainly "more in our eye than in many, many years".

New Delhi has long bristled against big-power involvement in its neighbourhood, and Indian officials privately say that greater U.S. involvement could be worrying in the long run.

"The U.S. is a bit of a wild card in all this. But I think it will be stupid of them to be doing anything here behind India's back. They might have differences elsewhere, tensions, but on Nepal they are on the same tracks," said Dixit.