Buses, cars and trucks rolled in and out of Kathmandu today after Maoist rebels lifted a road blockade that had cut off the capital from the rest of Nepal for a week.
Kathmandu, a city of 1.5 million people, had only a few weeks of fuel and food supplies left after the blockade choked off supplies from the southern plains and neighbouring India.
The Maoists, who unexpectedly lifted the blockade last night, gave the government a month to honour their demands to release jailed guerrillas and investigate the killing of their comrades in what they say are fake gunbattles.
Diplomats and analysts said the rebels, who are fighting to topple impoverished Nepal's constitutional monarchy, had lifted the blockade after demonstrating their power to hold the capital to ransom simply by the threat of force.
"It didn't take a single Maoist to enforce it, just a call was enough," said a Western diplomat. "This is a campaign of fear that sadly is working every time."
The rebels, who are believed to control nearly two-thirds of Nepal's rugged countryside, did not set up roadblocks to enforce the blockade on key highways.
The siege of Kathmandu was also an answer to military claims that the rebels had been weakened, said political analystas.
More than 10,000 people have died since the Maoist revolt broke out in 1996 in west Nepal and has now spread to each of the nation's 75 districts.
Nepal's embattled government said the lifting of the blockade would help efforts to re-start peace talks with the Maoists to end a conflict that analysts say neither side can win.
But the rebels are insisting the talks be held under the auspices of the United Nations. They also want the talks to discuss elections to a constituent assembly to prepare a new constitution that would decide the role of the monarchy.
The government says third party involvement in the talks is unnecessary. It also wants talks to begin without conditions.