"It is the Royal Palace's compulsion to reach a compromise with political parties to prove its democratic nature," US Ambassador James F Moriarty said at an interaction programme in eastern Nepal town of Dharan.

"Rather than expecting help from third parties, reconciliation among the legitimate political forces is the best option to resolve the crisis," the envoy said on Saturday.

Asserting that the US was in favour of restoration of democracy in the Himalayan Kingdom, Moriarty appreciated the seven party alliances' efforts to resolve the current political crisis. He called on "the eighth force"- the Palace to cooperate with the political parties.

He said, though the political parties were not satisfied with the declaration of municipality elections, negotiations must be carried forward to resolve the current stalemate.

He sharply criticised the Maoists saying "the Maoists are the main obstacle to the democratic process in Nepal."

Meanwhile, Maoist rebels, waging a deadly battle to overthrow the nation's Hindu monarchy, freed seven civil servants yesterday whom they had abducted a day earlier, an official said.

Bijay Nath Poudel, an administrator in the tea-growing district of Ilam, said all the government workers, who were kidnapped from a bus on Saturday in an area about 600 km east of Kathmandu, were released unharmed.