Reinstitution of Parliament

In a nationally televised address, the then King Gyanendra Bir Bikram Shah Dev reinstated the old Nepal house of representative on April 24, 2006.The King called upon the Seven Party Alliance to bear the responsibility of taking the nation on the path to national unity and prosperity, and end the civil war while ensuring permanent peace and safeguarding multiparty democracy.

The re-institution of Parliament was accepted by the SPA and declared that Girija Prashad Koirala would lead the new government. The SPA stated that the new parliament will hold elections for a body that would write a new constitution.

The move was rejected by the Maoists leaders and Baburam Bhattarai stated that merely restoring the parliament was not going to resolve the problems and that the rebels planned to continue fighting against government forces. Till date, Maoists demand the formation of a Constituent Assembly and abolition of the monarchy.

On April 27, however, the Maoist  responded to demands by Girija Prasad Koirala and announced a unilateral three-month truce in the Nepalese civil war.In addition to this, on May 1, Bhattarai announced that if "the elections [to a Constituent Assembly] are free and fair, one has to respect the result of the elections. Then of course we will abide by the verdict of the people." This was seen as a large step forward as it shows the first signs of Maoist acceptance of the democratic process.

On May 2, Koirala announced the new government cabinet including himself and three other ministers from the nepali congress: K.P. Sharma Oli from CPN, Gopal Man Shrestha from nepali congress and Prabhu Narayan Chaudhari from the United left form. This was followed on May 12 by the arrest of four ministers from the ousted royalist government and an investigation into alleged human rights voilation by the army during the General Strike.