Nepal sets up unity cabinet to agree constitution

Nepal's Prime Minister Baburam Bhattarai addresses the nation from his office in Kathmandu April 12, 2012.

KATHMANDU (Reuters) - Nepal's prime minister formed a coalition government on Sunday that includes members of the main opposition party with the hope of introducing a constitution and ending political turmoil in the impoverished Himalayan country.

The cabinet of Prime Minister Baburam Bhattarai, a former Maoist rebel leader, resigned on Thursday after a deal with opposition parties pressing for a unity government before they agree on the new constitution.

Nepal, tucked between giant neighbours China and India, has been plagued by instability for years even though a Maoist insurgency ended in 2006 and the monarchy was abolished, as the rebels had demanded, two years later.

The introduction of a constitution was a key condition of a 2006 peace deal that ended the conflict in which more than 16,000 were killed.

Bhattarai appointed an 11-member cabinet that included five members of his Maoist party, two from the main opposition Nepali Congress, and four from smaller regional parties, said Ram Rijan Yadav, the prime minister's spokesman.

"The prime minister will also appoint nominees from the UML and the process of cabinet making is likely to be completed by Monday," Yadav said, referring to another opposition Communist party.

Nepal's first republican constitution is meant to finalised before a May 27 deadline but political parties have yet to agree on the formation and number of federal provinces - a sensitive subject that has often triggered violent protests.

(Editing by Mayank Bhardwaj)