By the BBC's Daniel Lak

"The worst year in living memory," was how one Nepali analyst described 2001.

"Annus horribilis," agreed a newspaper editorial.

Dipendra was said to be fascinated by guns

Nepal's worst disaster of its horrible year was the massacre of eight members of the royal family on 1 June.

The killer was none other than Crown Prince Dipendra. A government inquiry later found that he had turned a gun on himself soon after shooting his father King Birendra, his mother Queen Aishwarya, his sister and brother, uncles and aunts.

The reason - reportedly - was a love affair with someone his parents had deemed inappropriate.

No one who was in Nepal at the time will ever forget the sense of doom and grief that seethed through a shocked population on the morning of 2 June.

Dipendra was said to have been smitten with Devyani Rana

The BBC and other international media were reporting the killing while the Nepalese media were being coy or ignoring reality altogether.

Anger built throughout that ill-fated weekend, not least because the government appeared to be withholding the truth from the people.

On Monday, after a comatose King Dipendra died, a new monarch was crowned.

At that point, anger exploded into several hours of fierce street violence.

The new king, Gyanendra, younger brother of the slain Birendra, had been put on the throne but the rioters believed that their new monarch was somehow involved in the palace massacre.

Many Nepalis simply could not believe the news

The inquiry eventually found otherwise, but to this day, many Nepalis do not believe the 240-page official report, complete with pictures and eyewitness accounts.

Some believe an elaborate and wildly improbable conspiracy theory involving foreign intelligence agencies, Gyanendra, a former Prime Minister and various other unspecified dark forces.

Others just point at inconsistencies in the inquiry report and dismiss the official explanation.

"How could one man shoot so many people, so quickly?" asked a pilot of my acquaintance, an otherwise worldly and urbane man.

He didn't expect what I know to be true, that state of the art machine guns can shoot 100 bullets in less than 10 seconds.

Dipendra could have killed 10 times as many people in the same two minutes that it took him to massacre his family.

From horror to rebellion

Yet Nepal defied the doomsayers and has put the massacre behind it. "We are a resilient people," says Kunda Dixit, editor of the Nepali Times newspaper.

A priest left Kathmandu on an elephant to remove bad luck

"We went through this horrendous event and all our institutions of democracy held firm and served us well. We were somehow stronger just to have survived, even if it was just to face another challenge."

That other challenge is Nepal's latest disaster, an exploding insurgency by Maoist rebels that dragged the army into a fight to the death with Nepalese citizens.

By any definition, this is civil war, but most Nepalis support the army action and the state of emergency that empowers it.

They blame the Maoists for scuppering peace talks with the government in November with a wave of nationwide attacks on police, government officials and soldiers.

Call for compromise

"There's no doubt," says Kunda Dixit, "that the Maoists have to take the blame for the current violence. The government was committed to peace talks, they'd had three public rounds of dialogue and there seemed to be some common ground. A ceasefire was holding. Then it all descended into mayhem."

The rebels pose a serious threat

Information on the army operations against the Maoists is scanty, in part because of state of emergency regulations.

But the soldiers appear to have the upper hand over the guerrillas, killing hundreds while defending government targets and lately, moving out in active pursuit of the rebels.

"I think both sides know this can't last," says Kunda Dixit, "We're approaching the brink of a gaping abyss and expect them to pull back, to look for face saving formulae but the Maoists will have to give up more than the government. It's going to be a tough beginning for 2002."

The New Year will begin for Nepal with empty government coffers, a king on the throne still establishing his authority and the army deployed against militant Maoist rebels.

The testing times for the Himalayan kingdom and its fabled resilience are far from over.