Recent Developments:

According to officials, on June 1, 2001, the Heir Apparent Dipendra went on a killing spree in the royal palace, in response to his parents' rejection of his choice of wife. His parents were killed and he died three days later. Following the carnage, the throne was inherited by Birendra's brother Gyanendra. In the face of unstable governments and a Maoist siege on the Kathmandu Valley in August 2004, popular support for the monarchy waned.

On February 1, 2005, King Gyanendra dismissed the entire government and assumed full executive powers in the name of combating the Maoist movement. In September 2005, the Maoists declared a three-month unilateral ceasefire which was not reciprocated by the royal government; the latter vowed to defeat the rebels by force. A few weeks later, the government stated that parliamentary elections would be held by 2007 even after the failed municipal elections.

On January 14, 2006, the Maoists attacked five military and paramilitary installations throughout the Kathmandu Valley. Bombs were detonated in two of the locations. Twelve people died, eleven at the Thankot checkpost where multiple blasts shook homes as far away as Matatheirtha. The public was shocked as this was proof that the Maoists were able to organize and plan a simultaneous attack on multiple locations within the Valley, long considered to be relatively safe from Maoist violence. During the attack on the Thankot checkpost, a local toll station was robbed, which was located less than 100 meters away from an orphanage housing sixty-four children.

The Maoists, through support from the seven parliamentary parties (SPA), arranged a mass uprising against the reign of King Gyanendra. The royal government used various means to quell the uprising, including daytime curfews. Thousands were injured and twenty-one people died in the uprising.

Foreign pressure continued to increase on King Gyanendra to surrender power. On April 21, 2006, Gyanendra announced that he was giving up absolute power and that "Power was being returned to the People". He called on the seven party coalitions to name a Prime Minister and that elections would be held as soon as possible. Both the U.S. and India immediately called on the SPA to accept this proposal. Many Nepalese protesters, however, still carried out rallies in numerous cities and vowed to continue the stir until they would achieve complete abolishment of the monarchy. The SPA felt the pressure of these protests as some took place directly outside the deliberations of Gyanendra's offer. Finally, at midnight on April 24, after nineteen days' tumultuous protest, the king called for the country's parliament to reassemble on April 28.

Parliament has since reassembled and stripped the king of his power over the military, abolished his title as the descendent of a Hindu God, and required royalty to pay taxes. Furthermore, several royal officials have been indicted, and the Nepalese government is no longer referred to as "His Majesty's Government", but rather as the "Government of Nepal". An election of the constituent assembly to rewrite the constitution has been declared unanimously to be held in the near future, with the possible abolition of the monarchy as part of constitutional change.

Following Gyanendra's relinquishing of absolute power, the Nepalese government and Maoist rebels agreed on a ceasefire. In August 2006, both parties came to an agreement on the issue of arms accountability, agreeing to ask the United Nations to oversee and keep track of the weapons cache of both sides. The government and the Maoists are trying to come to an agreement on the future of the monarchy.

As of 21 November 2006, Maoists and the Seven Party Alliance signed a peace deal. The agreement is intended to end the Nepalese Civil War, which has claimed more than 13,000 lives to death.

As of 15 January 2007, SPA and Maoists serve together in an Interim legislature under the new Interim Constitution of Nepal awaiting elections to take place in June 2007 to a Constituent Assembly, while all the powers of the Nepali King are in abeyance.On April 1, 2007 the SPA and the Maoist together formed an interim government. The interim government was mandated to hold the Constituent Assembly elections in June. 2007. But after the Election Commission doubted on the feasibility of holding election on the given date, the Constituent Assembly elections has fallen down into shadows.