KATHMANDU (AFP) -- The stakes are high for today's second set of talks between Nepal's government and rebel Maoists in determining whether a slow-moving peace process to end a decade-old insurgency remains on track, analysts say.

The rebels have warned that if the peace talks break down, they will call crippling, mass protests in the capital Kathmandu.

"The rebels' threat of protests in the capital cannot be taken lightly. They are a political group who have weapons, and they have concentrated their cadres in Kathmandu," said Rabindra Khanal, who teaches politics at Kathmandu's Tribhuvan University.

Both sides have observed a ceasefire since protests, spearheaded by the Maoists and political parties in a loose alliance, forced King Gyanendra to end 14 months of absolute rule in April and restore parliament.

But little progress has been made in ending the insurgency, which has killed at least 12,500 people, and the rebels have accused the government of dragging its feet and reneging on promises.

"We can't expect the meeting between the prime minister and the rebel chief to resolve all issues," said Kapil Shrestha, who also teaches political science at Kathmandu's Tribhuvan University. "But it will be crucial in showing how the two sides can move forward."

The areas of dispute between the rebels and government, and within the multi-party government itself, are manifold.

They include the future of the monarchy, disarmament of the rebels and control of the army and bringing the insurgents into an interim government.

The first meeting between Prime Minister Girija Prasad Koirala and rebel leader Prachanda in June led to a breakthrough announcement that a temporary constitution would be drafted within a month that would allow the Maoists to join a new interim government.

In addition the two sides agreed to hold elections for a constituent assembly that would rewrite the constitution permanently, a key rebel demand.

But little headway has been made since then.

The temporary constitution remains unfinished because the ruling seven-party alliance is divided on such issues as whether a referendum on the 238-year-old monarchy can take place to decide its ultimate fate.

The second round of high-level talks had been scheduled for late September, but were postponed because the alliance could not reach a consensus.

The slow-moving pace plays into rebel hands, said political analyst Khanal.

"The longer the seven party leaders take time to reach an understanding, the more the Maoists benefit. It will give them a chance to pile on more pressure and cash in on people's frustrations at the slow pace," Khanal said.

While Maoist protests in the capital are a possibility, a return to full-scale war is unlikely, said Rhoderick Chalmers, deputy South Asia project director of the International Crisis Group, an organization working to prevent conflict worldwide.

"They'd try to use mass demonstrations as a calibrated tool to pressurize the government to give ground in certain areas," said Chalmers.

"They (the rebels) do seem to have realized that they have pushed the military campaign as far as it will go and they would be loath to sacrifice the political openings they have worked hard to develop," he added.

Pressure from ordinary Nepalis is another factor that could prevent a return to war, said Tribhuvan University's Shrestha.

"For the parties and the Maoists, peace is the only option. The rebels can't go back to the jungle as they have come a long way since April," Shrestha said. "Plus, there's immense pressure from the Nepali people. The people have had enough of the conflict."