KATHMANDU -- At least 16 people were reported killed Wednesday in the latest clash between Nepal government forces and rebel Maoists in western Nepal despite local reports that the two sides were close to agreeing a cease-fire.

The Nepalese Defense Ministry said the fighting took place Tuesday at Arkhabang in the Gulmi district, about 250 kilometers west of the capital, and the casualties included 13 alleged Maoists and three security officials.

The Kantipur radio station quoted its correspondent on the scene as saying five security personnel had been killed, and reported police sources as saying about 500 Maoists were involved in the fighting.

It said government reinforcements were sent to the area from Kathmandu, Pokhara and Rupandehi districts. The Defense Ministry said the fighting followed a government attack on a Maoist shelter and training center.

Newspaper reports said the Nepalese government was likely to announce a truce with communist rebels on Wednesday following "high- level talks" with an unidentified Maoist leader in Kathmandu.

The Nepali-language daily **Rajdhani**, quoting sources in the royal palace, said the talks with a high-level leader flown in from a base in Kaski district were held on Monday and Tuesday.

He was flown back on Tuesday, the report said.

Both sides have reportedly made an informal agreement to a cease-fire and future negotiations. Maoist fighters broke off a previous cessation of hostilities in September 2001.

The newspaper said the government cabinet met until late Tuesday to approve the cease-fire. Nepal's Prime Minister Lokendra Bahadur Chand then brought the cease-fire proposal to the royal palace for endorsement by king gyanendra.

King Gyanendra is currently the "executive head" of state after he dismissed an elected government and assumed control of the Himalayan nation on October 4, 2002.

The Maoists have waged armed insurgency in Nepal, particularly in the mountainous area of western Nepal, for the past seven years seeking to replace the present political system with a communist republic.

Over 7,400 people have been killed since the conflict began.