History was created in Nepal on Monday night when King Gyanendra conceded the demand of the people to restore democracy. Jubilant Nepalese are celebrating the victory by greeting each other. Nepal Congress leader G P Koirala will lead the new government.

Indian Ambassador S S Mukherjee told the visiting media just a few hours before the victory, "I am humbled by the Nepalese who have spoken so abundantly in favour of democracy."

"It is the first successful non-violent movement of the 21st century in South Asia, which will set an example for the world," said a lawyer Gopal Chintan, one of the supporters of the movement.

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On Monday, when a resort in Egypt was bombed, seven car bombs exploded in Baghdad, and Hamas clashes in Palestine were the headline news in the international media, Nepalese quietly reminded the world with their non-violent movement.

The people's commitment to democracy and their resistance against the King and his monarchy were the most important factors that have set in motion the creation of a new Nepal, said a senior Indian diplomat. 

The city itself is getting back to normal. Shops and offices have reopened after 20 days.

Not many tears are shed over the resultant economic losses from the shutdown in a nation where the economic growth is just around 2 per cent. 

The king bowed down only because he was forced to see reason by the people on the streets.

The Indian ambassador was in constant touch with the palace.

To the surprise of many, the king sent an invitation last weekend to talk to Mukherjee. It was seen as a sign of nervousness on Gyanendra's part.

American Ambassador James Moriarty and the Chinese embassy held many consultations with their Indian counterparts, according to an Indian diplomat in Nepal.

"We had convergence on issues," he said.

Although the Nepalese have won this victory for themselves, India's role remained vital.

Indian diplomacy bungled at many turning points, particularly Prime Minister Manmohan Singh's [Images] statement on board his aircraft en route to Germany [Images] didn't help the ground situation.

Even after there was an absolute rejection of the king's announcement in Nepal, Dr Singh was ill-advised to say, "The announcement was in the right direction."

However, after some flip-flops, Foreign Secretary Shyam Saran's press briefings helped. Saran's message that 'the king's announcement is not enough' has gone down well with the people and was one of the factors behind Gyanendra's second announcement.

India still calls the shots and have the prime place in the regional power structure. The US and other Western countries have followed India's position in the last seven days.

In the beginning all the foreign powers wanted only 'legitimate political forces', but soon the Indian embassy in Nepal decided to dump the past and face the emerging Nepal head-on. 

Till the winter of 2005, Indians and others tried unsuccessfully to let political parties get back power without the Maoists setting the agenda from within or outside. But then the Indian side blinked first and tried to lock the Maoists in some kind of dialogue.

Eventually, the Seven Party Allaince and the Maoists signed an agreement on Novemebr 22, 2005.

Sitaram Yechuri and National Securty Advisor M K Narayanan contributed to the agreement while remaining in the background. 

The Indian side is stoutly denying the fact that Prachanda and Baburam Bhattarai were given accommodation in Noida near New Delhi, but the fact remains that the Indian side took the risk of helping Nepalese political leaders to allow the Maoists to join the mainstream.

Only time will tell if the Indian side moved wisely or not. 

The pragmatism on the Indian side to help Nepal's political parties to reach an agreement may not be entirely wrong if you listen carefully to what the Nepalese were saying over the last seven days on the streets.

Only after the people rejected the King's first announcement of April 21, did all the foreign powers involved here revise, correct and change their stance somewhat grudgingly. 

Now, political parties are strugling to set their own agenda and their agenda with the Maoists. They are now worried about the modalities which they need to adopt with the Maoists. They don't want the unconditional entry of Maoists either in government or in the process of the Constituent Assembly. 

The challenge before the Maoists is to be flexible to get into civil mode and the challenge before political leaders is not to become too flexible and surrender to the Maoists' agenda that will encroach upon their constituency.

Also, two vital questions are difficult to answer.

Will the political parties, who have got power back in their hands, remain united when the glue of 'anti-King' agenda is not there?

And, will the retreat of King Gyanendra culminate in a real victory for Nepal?

Nepalese will soon realise that though the battle is over, the war is yet to be won.