Nepal's government and Maoist rebels signed a peace agreement Tuesday aimed at ending nearly 11 years of conflict that killed more than 13,000 people and displaced hundreds of thousands more.

Prime Minister Girija Prasad Koirala and the Maoist leader, who goes by the name Comrade Prachanda, signed the peace deal at a formal ceremony in Kathmandu.

"This ends more than one decade of civil war in the country," Prachanda told reporters after the signing.

The accord makes permanent a ceasefire agreement that was reached in April, after mass protests forced Nepal's King Gyanendra to reinstate parliament and end a year of direct royal rule that had been backed by the Nepalese army.

The interim government that now runs Nepal will be replaced by an administration that includes the rebels, who theoretically adhere to a strict version of communism first espoused by Chinese leader Mao Zedong.

Rebel leaders have said they are willing to take part in what they call "bourgeois democracy" if Nepalese voters so decree.

Nepal's new government will take office next month. It has pledged to organize elections to an assembly that will re-write the country's constitution.

The fate of the country's 256-year-old monarchy will be the main issue in that exercise, analysts say.

Nepal's king criticized for takeover

In 1990, Nepal became a constitutional monarchy and parliamentary democracy. Political leaders and human rights activists have complained that too much power remained in the hand of the country's kings, however.

King Gyanendra's imposition of direct rule in 2005 was widely criticized both inside and outside Nepal. There were allegations of human rights abuses and hundreds of disappearances.

At the time he imposed direct rule, the king said he needed extra powers to fight the Maoist guerrillas controlling most rural areas in the mountainous country. But the royal takeover served mainly to force the rebels and democratic politicians into an alliance against the king.

Human rights groups and the United Nations have condemned both the Maoists and the Nepalese security forces for arbitrary arrests, torture and extra-judiciary killing.

Earlier this week, a government-appointed commission accused King Gyanendra of ordering some of the worst excesses against those opposed to royal rule.

Nepal is home to more than 26 million people and is one of the world's poorest countries, with an average per capita income of $1,600 per year.

with files from the Associated Press