The Nepali Maoists have announced an indefinite economic and transport blockade in Kathmandu and escalated the conflict in the country to an apparent climax. All the three major transit routes, which run through the Maoist-dominated ‘Ring Area’ comprising nine districts around the Kathmandu valley, have been blocked. The capital is cut off from the rest of the country. While there is a growing demand for a peaceful resolution of the devastating insurgency, the first ever Maoist blockade in the capital has posed a grave threat to the security situation in the country.The eight year old insurgent movement of the Communist Party of Nepal-Maoist (CPN-M) to replace the monarchy with the ideal socialist state has spread its tentacles throughout the country including Kathmandu, where the Maoists detonated more than 60 bombs in and around the valley. After imposing successful blockades in almost all the remote districts since the breakdown of the ceasefire in August 2003, the Maoist-affiliated workers union, All Nepal Trade Union Federation (ANTUF), and their students union All Nepal National Independent Students Union-Revolutionary (ANNISU-R), has announced this blockade in protest against the killing of their leaders and demanded the release of detained leaders. On the one hand, the Maoists have been demanding UN mediation, and on the other hand they have started pushing their sister and front organisations to deploy terror tactics. This strategy of not getting directly involved would enable them to avoid any direct criticism from the international community.The Maoists have demonstrated their military capability through two consecutive major attacks on security and government installations including Bhojpur in the eastern region and Myagdi in the western region during March 2003. Their extensive use of landmine ambush against the security forces, (approximately 270 bomb blasts) has obstructed counter-insurgency operations against them. Recently, the first ever pre-planned security force operation against the insurgents in the Binayak area in Achham district during August 10-12, also failed to achieve any major success. The Maoists have been averting any direct major confrontation with the security forces; they commonly practice a hit and run strategy. Modern weapons and high-tech communication systems that have been looted from the security forces have been found in the hands of the insurgents, which confirms that the Maoists are certainly not ‘‘ill equipped’’. In recent times, Maoists have looted food material, medicine etc from government reserves and international donor agencies. They have also urged the international NGOs to pay tax and register with their ‘‘People’s Government’’ to continue their projects, which led to the temporary cancellation of the developmental projects in rural areas.The Maoist blockade across the country has severely traumatised the people. Half the population is deprived of basic amenities; more than 40 per cent are already living below the poverty line. The ANTUF has blacklisted more than 24 multi-national companies centered around the Kathmandu valley. Indian business interests have been specifically targeted.Meanwhile, the Maoist-affiliated students union, All Nepal National Independent Student Union-Revolutionary (ANNISU-R), whose terrorist tag was lifted in July 2004, has warned the government of resumption of Kathmandu focused indefinite strikes in the educational institutions. It has been arguing for ‘‘reforms’’ in the educational system. The ANNISU-R, aspiring for a separate ‘‘combatant force’’, has been involved in a rigorous recruitment programme.Though the 2004-05 budget allotted $198.11 million to improve its security, there is no concrete development in combating the insurgency. The total number of casualties reached 10,000 and civilian casualties and serious human rights violations are routine. Since the breakdown of the ceasefire on August 27, 2003, Maoists have abducted more than 19,000 people, mostly students and teachers, to ‘‘re-educate’’ and force the abductees to participate in their ‘‘people’s training camps’’. Economic and social development is being seriously hampered. The tourism industry has started closing down. Now the Maoists are making a last attempt to paralyse the economic condition of the country, where donor countries have already cut short their investments.The present stalemate clearly tells us that a military solution is not possible in the near future and the country cannot wait and suffer till a military victory is achieved. This has to be realised by both the warring parties to put an end to the destructive conflict.The writer is a research associate at the Institute of Conflict Management, New Delhi