KATHMANDU (Reuters) - Nepal’s Maoist former rebels took a shock early lead on Saturday in an election aimed at cementing a peace deal that ended a decade-long civil war.

Maoist leader Prachanda is garlanded by his comrade Matrika Yadav (top) while his second-in-command Baburam Bhattarai (R) and Pampha Bhusal (L) look on after being declared winners in the election in Kathmandu April 12, 2008. Nepal's Maoist former rebels took a shock early lead on Saturday in an election aimed at cementing a peace deal that ended a decade-long civil war. REUTERS/Desmond Boylan

Early tallies from Thursday’s vote show the Maoists lead in 65 out of 122 constituencies where counting has begun.

They have also won 23 out of the 33 constituencies where results have been declared, election officials said. The Maoists say they are committed to democracy but are still classified as a terrorist organization by the United States.

“This is the people’s victory,” hundreds chanted outside a counting centre in Kathmandu, many with the hammer and sickle painted on their faces or with Maoist flags wrapped around their heads.

Final results of the election, Nepal’s first in nine years, could take around 10 days and are almost certain to lead to a coalition government, analysts say.

An elected 601-member special assembly is supposed to write a new constitution and usher in a republic in the impoverished Himalayan state, ending a 240-year-old Hindu monarchy.

Maoists’ leader Prachanda, whose nom de guerre means fierce in Nepali, won a landslide victory in his constituency. He emerged from a counting centre with his forehead smeared with vermilion and his head swathed in layers of marigold garlands.

“We will create a stronger basis for sustainable peace ... economic development and a federal republic by including all sections and communities of people.

“We will establish greater national unity with all political parties after the election,” he said, in a statement signaling his commitment to a coalition government, analysts said.

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Kunda Dixit, editor of the weekly Nepali Times, said: “At the rate it is going, the Maoists will be the number one party.

“Trends so far suggest that there was an overwhelming desire on the part of mostly young voters for change, peace and development.”

There are 240 seats decided on a first-past-the-post basis, with another 335 seats decided by proportional representation and 26 to be nominated by the cabinet.

MAOIST PRAGMATISTS

Few results are in from the southern plains, home to nearly half of the population, and Maoists are thought to have weaker support there. The complex system also means the former guerrillas are very unlikely to get a majority.

“The trends don’t reflect how they would do in the proportional elections,” said a Western diplomat.

A Maoist victory would be hard to stomach for Nepal’s conservative army, traditionally loyal to the king, as well as for the governments of the United States and India. New Delhi worries it could encourage India’s own Maoist rebels.

Prachanda, who wants to be Nepal’s first president, insists he wants friendly ties with Washington, New Delhi and Beijing.

“We will have good relations with all countries, including India and China,” he said.

These days his movement shies away from the language of Marx and Mao, proposing public-private partnerships but not nationalization, advocating land reform and social justice but accepting globalization is a fact of life.

Maoist ministers already serve in Nepal’s coalition government, set up after a 2006 peace deal. Several diplomats said they had shown themselves to be pragmatists.

The election, and the abolition of the monarchy, had been the main demands of the Maoists during their long insurgency in which more than 13,000 people died.

The Maoists’ strong showing was regarded as a vote against mainstream political parties, blamed for rampant corruption and endless squabbling in the past, analysts said.