Nepal has undergone a radical transformation in recent years as the nation ended its civil war, abolished the monarchy, and established a multi-party democratic republic. The former Maoist insurgents are once again part of the government and the country is moving forward to try to formulate a new constitution for the new republic that takes into account regional groups' aspirations. While trends are positive at present, significant challenges remain to be overcome. A February 2011 compromise that led to the election of a new government in Nepal has given many political observers some degree of cautious optimism that the country may be continuing on its path from a Hindu monarchy to a representative democracy. However, enormous challenges remain as the new government of Prime Minister Jhala Nath Khanal, of the Communist Party of Nepal United Marxist-Leninists (CPN UML), seeks to draft a constitution before a May 2011 deadline. Before February 2011, Nepal had been in a political vacuum for seven months due to a deadlock in the Constituent Assembly, where no party or coalition was able to attain majority support. That logjam was loosened when Maoist candidate Prachanda withdrew from consideration for prime minister, and the Constituent Assembly (CA) first formed in 2008 to create a new government. They elected Khanal as prime minister, with backing from the Maoists, though the Maoists remained outside the government until March 2011. Details of a "secret" deal between the CPN UML and the Maoists, which broke the political stalemate that had prevented the forming of a new government, have now emerged. Disagreements over the interpretation of the seven-point deal hindered the beginning of the new government in February 2011, but the entry of several Maoists into the government in March 2011 appears to indicate that another impasse has been averted. While Maoists have taken up several ministries including Peace and Reconstruction, they have not been given the Home Ministry. The Maoists will reportedly be given 11 ministries in total as part of the power sharing deal with the CPN-UML. Prime Minister Khanal also reportedly agreed to consider all options with regard to the future disposition of the 19,000 former Maoist combatants. This potentially signals less resistance to the integration of Maoist forces into the army by the CPN-UML than they demonstrated before. It has also been reported that the two parties have agreed to lead the government by turns. The agreement between the two parties was a positive step, but analysts note that the stability of the government will likely be tested by upcoming decisions that could expose widely differing interests between the two parties. The government faces the challenge of completing the peace process that began in 2006 by drafting a constitution before a May 2011 deadline. The government may not meet that deadline, as it faces two large challenges as the deadline approaches: completion of the peace process and crafting a new federal structure as part of the new constitution. The CA may well decide to extend the deadline once again should the government not finish its work in time. Political parties and militant groups representing the Madhes minority of the southern Terai region have put the government on notice that the new constitution and federal structure must take into account their political aspirations and concerns. After 16 unsuccessful votes over approximately seven months, the Constituent Assembly finally elected a new government in the 17 th round of voting in February 2011. This was made possible by the withdrawal of the Maoist candidate Prachanda, who had previously led the Maoist insurgency. The Maoists made a deal with the Communist Party of Nepal Marxist Leninists (CPN UML) to do this and support the CPN UML candidate Prime Minister Khanal. As a result, Khanal received 368 votes out of 601 in the CA to defeat the Nepali Congress candidate. The Nepali Congress candidate, Ram Chandra Poudel, received 122 votes while Deputy Prime Minister Gachedar, representing a Madhes coalition, received 67 votes. The Marxist Leninists previously supported a Maoist government in 2008 but subsequently withdrew support due to a disagreement over control of the army, which led Maoist leader Prachanda to relinquish the prime ministership. One of the key provisions of the 2006 peace agreement that ended a decade-long guerrilla struggle and brought the Maoists off the battlefield and into the political process was a provision which has led to great debate over how and to what extent former Maoist fighters will be integrated into the Army of Nepal. The departure of the United Nations Mission in Nepal (UNMIN) monitoring group in January 2011, which was overseeing caches of arms and the cantonments of former Maoist fighters, led the former caretaker government to set up the Special Committee for the Supervision, Integration, and Rehabilitation of Maoist Fighters to take over the U.N.'s oversight function. UNMIN had been monitoring the situation since January 2007. A key positive development came in January 2011, when Maoist leaders formally relinquished control of their 19,000-member army to a government committee. Despite this, details of how the fighters will be reintegrated into society or integrated into the army of Nepal, and in what numbers, remain to be resolved. The Maoists have held to the view that all former combatants should be integrated into the Army of Nepal. Other political parties have held the view that Maoist numbers should be kept to 6,000 to 8,000 and that the rest should be assisted in their reintegration into private life. It is estimated that about 13,000 to 14,000 of the 19,000 combatants are still in the cantonments. Just how this will be resolved remains to be seen. Forward movement in this area would be viewed as a positive factor that should help move the constitution process forward. The likely contentious nature of a new federal structure may lead the government and constitution drafting committees to defer the issue of a new federal system to a later date, at which time the polity of Nepal may be better able to absorb the shock of potential opposition to a new structure. The main regionally based socio-political cleavage in Nepali society is between the Madhes people of the Terai and "hill" people. The Madhes of the Terai region that spans the southern border with India are not pleased with the political status quo, which divides their region and, from their perspective, gives the "hill people" a disproportionate say in government. One of the key cleavages in Nepali society is between the lowlanders of the Terai plain and the hill people of higher elevations and, in general, higher caste status. Any redistricting that does not unify the Terai into one administrative unit, where the Madhes would clearly dominate, is not likely to be well received by Madhes groups. The Madhes are reportedly displeased by their marginalization from the ruling coalition and have warned that there would be "fire in the plains and the hills" if the new constitution fails to address their aspirations. There are several Madhes political parties as well as armed groups in the Terai that have resorted to violence to promote their cause in the past. The Tharu group, which is also located predominantly in the Terai, opposes its inclusion within "One Madhes" where it would be a minority relative to the Madhes, and instead favors its own administrative district. A new development in the 17 th round of voting to form a new government was the unsuccessful entry of Bijay Kumar Gachedhar to contest the prime ministership on behalf of an alliance of four Madhes political parties. In May 2009, former Prime Minister Pushpa Kamal Dahal, better known by his nom de guerre Prachanda, resigned over a dispute related to his call for the dismissal of the former Chief of Army Staff Rookmangud Katawal. Prachanda, leader of the Communist Party of Nepal-Maoist (CPN-M), sought the dismissal of Katawal, who has since retired over the issue of integrating former Maoist fighters into the Army of Nepal, which Katawal resisted. At the core of the political crisis of May 2009 was the dispute between the Maoists and the Army over the integration of some 19,000 Maoist fighters into the Army of Nepal. Debate on this has focused on the numbers of fighters to be integrated (with the Maoists wanting all fighters integrated and the other political parties favoring far fewer), and whether Maoist forces will be integrated as whole units or attached to existing Army of Nepal units. The Nepali Congress (NC) has opposed Maoist plans to integrate their forces into the Nepali Army. Instead, the NC advocates that they should be placed into an industrial security force, the police, or other sectors. Some estimates place the number of former Maoist fighters in cantonment at 19,000 or more. The Nepal Army is thought to number approximately 95,000 soldiers that are divided into six regional divisions. Prachanda's CPN-M government was replaced by a 22-party coalition. This loose coalition has proven unwieldy in the actual functioning of government. The CPN-M also obstructed the sitting of parliament, held general strikes, and threatened to launch a popular movement against the government. The Maoists created a crisis by preventing the passage of the national budget, introduced to parliament in July 2009, although it was passed in late November 2009. The CPN-M was also reportedly resentful of what it perceived as interference by India in the Kutawal affair. This background provides a context for assessing the stability of the current government, which once again includes these two communist parties. Religion has long been an important factor for Nepal's 29.3 million inhabitants, where 81% of the population is Hindu and 11% of the population is Buddhist. Nepali is the official language, though there are over 100 regional and indigenous languages spoken in Nepal.