Sun May 7, 7:34 AM ET

KATHMANDU (AFP) - Nepal’s Maoist leader has urged the new government, which wrested power from King Gyanendra last month, to begin peace talks as soon as possible and warned that the rebels would fight on if need be.

"This (talks) should be done as soon as possible. The more time it takes, the more complicated it will be," rebel leader Prachanda told the weekly news magazine Nepal in an interview published on Sunday.

"We are trying to bring Nepal into a new era through peaceful political competition. But we are prepared to fight till the end if the royal army engages in conspiracy," said Prachanda.

The government last week matched a Maoist ceasefire after a decade of unrest that has claimed more than 12,500 lives, pledging to release political prisoners and pursue talks with the rebels in an effort to restore democracy.

It is the third time that the government and rebels have called ceasefires at the same time and tried to start peace talks, but on previous occasions, negotiations broke down and the country was plunged back into conflict.

A senior minister told AFP that talks would be underway soon, but could not provide a timeframe.

"The cabinet has not yet decided about when the talks would start but I am sure that they will begin very soon," Home Minister Krishna Prasad Sitaula told AFP.

Nepal’s newly appointed Prime Minister Girija Prasad Koirala is also in favour of a prompt start to the talks, said a senior official who met with him on Sunday.

"The prime minister has assured that the talks process would start soon," Jhalnath Khanal of the Communist Party of Nepal (Unified Marxist-Leninist) told AFP after their meeting.

"The government is planning to send a letter to Maoist leaders to kickstart the negotiation process," Khanal said.

Once deadly foes, the political parties and the Maoists late last year entered a loose alliance against King Gyanendra to challenge his absolute rule proclaimed in February 2005. They brought hundreds of thousands onto the streets.

The monarch, the contitutional head of the army, backed down in the face of mass protests, which left at least 19 people dead, and recalled parliament after a four-year break.

The politicians immediately backed plans to call elections to a body to rewrite the constitution and limit the powers of the king -- a key demand of the Maoists who began their "people’s war" in 1996 to overthrow the monarchy.

The Maoists have not yet chosen the members of their negotiating team, but Prachanda told the Nepal magazine that rebel prisoners held by India, which include senior party members, should also be released.