The announcement by Prachanda, the elusive rebel leader, on Friday that he would join the peace process came just hours after Khadga Prasad Oli, the deputy prime minister, offered security to Prachanda and said that negotiations would be ineffective unless he took part.
"The peace talks will be between our chairman and Girija Prasad Koirala, the country's new prime minister," senior rebel leader Matrika Yadav told reporters in the capital, Kathmandu.
“These talks, we believe, will be conclusive,” he added.
No date has been set for talks, aimed at ending the Maoist insurgency that has killed more than 13,000 people since 1996.
Oli has predicted that Nepal will have a constituent assembly within 12 months and a new constitution by November 2007.
That would meet a key demand of the communist rebels, who joined political parties in a campaign against King Gyanendra - although the rebels want an interim constitution immediately.
The assembly will decide the king's role.
The United Nations has offered to help in planning and conducting constituent assembly elections, and in writing the constitution.
Meanwhile the country's new government has arrested or suspended some principal players of the king's ousted regime. The State radio reported on Friday that the government had detained four former Cabinet ministers and one junior minister of the ousted royal government.
Prime minister Koirala will lead
the government in the talks
Gyanendra gave up his authoritarian rule last month after nationwide protests.
A Home Ministry official, speaking on condition of anonymity due to policy, told the Associated Press on Friday that eight senior police and intelligence officials had been suspended while a judicial commission investigates them for ordering or supporting human rights abuses during the demonstrations.
After weeks of anti-monarchy protests, Gyanendra reinstated Parliament, which reconvened on April 28. He also appointed a prime minister selected by the political parties.
The new government has matched the rebels' unilateral three-month cease-fire and dropped terrorism charges against them. However, sporadic rebel attacks have continued.