While Nepal created a landmark in 2006 with the major parties uniting with Maoist guerrillas to stage a bloodless revolt that toppled the dictatorial King Gyanendra and ended a 10-year insurgency, 2007 failed to live up to the nation's expectation and was a year of wasted opportunities.
Poised to hold a historic election that would have enabled the people to choose between the king and a republic, this year instead saw the credibility of the Girija Prasad Koirala government plummeting after it failed to hold the election twice.
It also saw the parties, whose misrule in the past had triggered the communist uprising, revert to their old ways, fighting for power and failing to address national crises. The Maoists, who had signed a peace accord in 2006 and pledged to renounce violence, emerged as a party still wedded to violence.
Yet, 2007 had the best start possible with the implementation of a new constitution in mid-January followed by the Maoists returning to parliament that they had left in the 1990s, condemning it as a meat shop.
The first session of the new 330-member parliament Jan 15 - with the Maoists taking oath - was hailed as a great moment also because the house announced that the constituent assembly elections would be held in June.
The guerrilla army of the Maoists began to be confined to makeshift cantonments while the UN began locking up their arms and registering the combatants to ensure free and fair elections.
However, the first seeds of discord were sown less than a week after the Maoists returning to mainstream politics when they clashed with a party that was emerging as a rival in the Terai plains, the Madhesi Janadhikar Forum.
The death of schoolboy in Lahan town resulted in violence, arson and looting that continued for four days despite curfew.
After Lahan, two more major incidents of violence shook the Terai.
In Rautahat district, fresh clashes between the Maoists and the Forum resulted in the death of over two dozen people, mostly Maoist supporters.
In September, the gunning down of a powerful landlord in Kapilavastu district, who was close to the palace and army and had led a vigilante group against the Maoists, sparked an orgy of violence in which 29 people were killed.
The Kapilavastu violence also had undertones of sectarian strife with at least two mosques being attacked by mobs.
Although the Maoists officially ended their "People's War", the Terai became the new cauldron of violence with Maoists, the Forum and over a dozen armed groups going on the rampage.
At least 300 people have died in the plains since January, thousands have been displaced and property worth millions of rupees has been destroyed.
The Terai groups are calling for an autonomous plain region with the right to self-determination, deepening the rift between Nepal's elite hill community and the plains people.
Forced to postpone the June ballot due to the violence, the government failed to heal the wounds and the turmoil escalated. In December, a minister from Prime Minister Girija Prasad Koirala's Nepali Congress party resigned along with three legislators from the plains to form a regional Terai party. A former minister teamed up with the Forum to launch a fresh agitation from Dec 30.
The government had also to grapple with the restive Maoists.
When the ruling parties signed the peace accord, they pledged to integrate the Maoist People's Liberation Army (PLA) with the state army, disclose the whereabouts of over 1,000 people who disappeared after being arrested by security forces, and compensate the families of those killed by the state.
But more than a year later, the government has not kept its promise. There is growing concern by the international community, especially about the future of the PLA combatants who have been corralled for almost a year now.
Though a UN scrutiny is likely to considerably downsize the PLA, whose strength was originally registered as over 31,000, the remaining combatants' merger with the army remains doubtful, given the resistance by a few hardliners in the army and the government's own dubious stand regarding monarchy.
Koirala, who came to power agreeing to hold the election that would decide King Gyanendra's fate, gave rise to doubts about his intentions by making different statements about monarchy.
He first urged the Maoists to retain the king and then, upon their opposition, suggested that the king's grandson schoolboy, Hridayendra, could be made a minor king with his grandfather and father abdicating.
The distrust caused the Maoists to leave the government they had joined in April five months later and declare war on the election.
The Maoists are now saying that free and fair polls are impossible as long as the king remains and are demanding the abolition of the crown first.
They tabled a proposal in parliament in October but were blocked by Koirala's Nepali Congress party. The demand is still being debated in the house and is unlikely to be resolved by this year.
As the election grows more distant, the security situation has worsened.
In September, three near-simultaneous explosions rocked the capital, killing three women and exposing the vulnerability of the government.
The main plotters have yet not been arrested.
The Maoists have also been on the rampage. They faced severe condemnation after admitting to the murder of a journalist in the Terai. A second journalist, missing for over four months now, is also feared to have been killed by them.
In December, the Maoists hit the headlines worldwide for assaulting a Swiss trekker who refused to pay them money.
King Gyanendra, who stoked instability and violence by trying to capture power through an army-backed coup in 2005, has also not fared well in 2007.
Although he has not faced the election that could end his 238-year-old dynastic rule, he stands in greater jeopardy with the Maoists trying to push their republic demand through in parliament.
While an election could give him a slender chance, the new offensive leaves him helpless.
Meanwhile, the government is moving to take over his inherited property, including the royal palace, and put them to public use.
Throughout 2007 he had to undergo other humiliations like the axing of his social and religious privileges.
In spring, in an unprecedented incident, angry crowds stoned the royal motorcade when the king jumped the queue at the Pashupatinath temple to offer Shiva Ratri worship.
The year also saw a new estrangement between Nepal and India, the neighbour that brokered the peace agreement between the Maoists and the parties.
There are growing allegations against New Delhi of building unilateral structures in the India-Nepal border area and causing submergence in Nepal, of trying to fuel unrest in the Terai and of occupying Nepali territory.
Although the allegations have been repeatedly rejected by India, they have fallen on deaf ears. The Maoists have been the most vocal in making the charges and visits by Indian Foreign Secretary Shiv Shankar Menon and India's special representative Shyam Saran failed to improve ties.
Nepal: Milestones 2007
Here is a timeline of major events in Nepal in 2007:
Jan 15: New constitution promulgated. Monarchy suspended, Maoists return to parliament.
Jan 17: UN starts registering Maoist soldiers, locking up their arms.
Jan 19: Riot in Nepal's Terai plains.
Jan 25: Government decides to remove King Gyanendra's image from currency notes.
Feb 13: Maoist chief Prachanda makes his first pubic appearance at a rally in Kathmandu after remaining underground for almost 15 years.
Feb 16: King Gyanendra's car stoned as he goes to Pashupatinath temple on Maha Shivaratri.
Feb 18: King issues a message on 57th Democracy Day, justifying his coup in 2005. It triggers an outcry. Parliament decides to punish him by nationalising the wealth he had inherited.
March 24: Fresh clashes in Terai. At least 28 killed, mostly Maoists.
April 1: Maoists join government.
April 20: Nepal gets new national anthem where all references to monarchy are erased.
May: Maoists paralyse parliament, demanding abolition of monarchy. June election is postponed.
May 16: Ace climber Apa Sherpa breaks his own record by climbing Mt Everest for the 17th time.
May 28: Clashes in Bhutanese refugee camps, one dead in police firing.
June 7: King's birthday boycotted by diplomats, ministers and bureaucrats.
July 31: Mahabir Pun does Nepal proud by winning the Magsaysay for his efforts to connect remote villages through the Internet.
Sep 2: Serial blasts in Kathmandu, three women killed.
Sep 6: Crown Prince Paras suffers major heart attack but survives after emergency surgery.
Sep 15: Indian Foreign Secretary Shiv Shankar Menon visits Nepal to urge parties to hold the election.
Sep 16: Riots in Terai again, at least 29 killed.
Sep 18: Maoists leave coalition government; vow to foil Nov 22 election
Sep 22: Indian yoga guru Swami Ramdev's yoga camp in Kathmandu deferred due to security threats
Sep 24: Nepal celebrates after Prashant Tamang becomes Indian Idol.
Sep 25: Nepali Congress unifies with breakaway faction.
Sep 30: Maoists ask government to call special parliament session and abolish monarchy.
Oct 1: King visits guardian deity of the royal family, the Kumari, as a commoner while the prime minister is accorded his earlier status.
Oct 5: Nov 22 election postponed indefinitely.
Oct 10: Maoists table proposal in parliament to scrap monarchy. Indian PM Manmohan Singh sends special envoy Shyam Saran to resolve the crisis.
Oct 23: Cancer fighters hold concert at Everest base camp, setting a record for the world's highest gig.
Oct 24: After losing billions for years, Nepal cuts subsidy on fuel and hikes gas prices.
Oct 31: Maoists admit their cadres abducted and killed a journalist in south Nepal.
Nov 2: US offers to resettle Bhutanese refugees
Nov 14: Nepal decides not to expand UN's mandate in the peace process.
Nov 24: Former US president Jimmy Carter offers a Nepal peace formula.
Dec 9: Army chief Gen Rookmangud Katawal goes to India, resuming ties with Indian Army.
Dec 19: Suspected mass grave found in Kathmandu where army is suspected of killing and burying 49 Maoist prisoners.