INTERVIEW - Nepal PM says Maoist peace process stalled

By Gopal Sharma

KATHMANDU (Reuters) - Nepal's new prime minister said on Thursday a peace process that ended a deadly civil war in the Himalayan nation had stalled after Maoists quit the government in May.

Madhav Kumar Nepal replaced Maoist Prime Minister Prachanda after the former rebel leader quit last month over his inability to sack army chief Rookmangud Katawal, who he had accused of not taking orders from the civilian government.

The Maoists have since regularly obstructed parliament sittings, organised general strikes and burned the new leader's effigy in protests to press for the removal of the army chief.

"The peace process is stalled and it is not moving forward smoothly," the 56-year-old Nepal told Reuters in an interview at his red brick house.

"The Maoists want to show that they are honest about peace. But their behaviour is not so," Nepal said, sitting under photographs of people killed three years ago during protests against the now deposed monarchy.

"They need to transform and change their behaviour. Otherwise they will be isolated," he said of the former rebels.

Analysts say the prime minister's comments highlight fears that growing lawlessness is taking hold in Nepal, threatening the economy as strikes hit businesses, as well as undermining the country's attempts to embrace democracy and a new constitution.

The Maoists were not immediately available for comment but in the past they have promised not to desert the peace process.