In a major capitulation, Nepal's King Gyanendra has agreed to restore parliament -- a key demand made by pro-democracy protesters, who had been demonstrating in the streets of the capital for nearly three weeks.
Opposition leaders welcomed the announcement, and may call off a massive demonstration planned for Tuesday.
It was the move Nepal's opposition leaders had been fighting for. Speaking on state television late Monday, King Gyanendra announced parliament would be restored.
He says, "In the spirit of the people's movement, and in order to resolve Nepal's conflict and other problems … we reinstate the house of representatives, according to the road map laid out by the opposition political parties."
Parliament will meet again on Friday. But the king suggested there will still be a long way to go before all of Nepal's problems are resolved.
He says, "We call upon the seven party alliance to bear the responsibility of taking the nation on the path to national prosperity, while assuring permanent peace and safeguarding multi-party democracy."
Opposition party leaders hailed the announcement as a victory for the people's movement.
It remains unclear whether a massive demonstration planned for the capital Tuesday would still take place.
King Gyanendra dismissed parliament in May 2002. In February last year, he dismissed the government and assumed absolute power.
He justified the move by saying the parties had failed to organize elections or end the Maoist insurgency wracking the countryside.
Since then, an alliance of seven mainstream political parties has been organizing scores of anti-government protests. But the demonstrations only gathered real momentum in recent weeks, when parties also called a nationwide general strike.
Police have fired rubber bullet and tear-gas at protesters, who sometimes attack them with stones. At least 14 protesters have been killed.
Earlier this week, the seven-party alliance rejected an offer by the king to form an interim government. Still, the king's announcement may be seen as too little, too late by some.
Many protesters have called for the king to step down, and for an end to Nepal's monarchy.
The Maoist rebels, who control parts of the countryside, are unlikely to react positively. They have fought to topple the monarchy since 1996.