In late October 2004, there was a brief flicker of hope that a unilateral Maoist rebel (Group Profile) nine-day ceasefire, which was tacitly matched by government forces, might actually extend through the high Hindu holiday of Diwali in mid-November and perhaps even through to December 2, 2004 as called for by the Nepal Civil Peace Commission. However, by October 27, Maoists had instigated a 48-hour nationwide work stoppage and within another two days, a string of violent clashes had erupted. The US Department of State issued its second Nepal Travel Warning in six weeks (September 14, 2004 (Advisory) and October 27, 2004 (Advisory)) and its sixth warning the 10 months.

After a skirmish that left at least 10 rebels dead, authorities reported in early November that several hundred Maoists stormed and destroyed several government buildings in Gamgadi, the administrative centre of the remote hill district of Mugu. Though it is rare for rebels to assemble such a large force, it should be noted that Mugu is a Maoist stronghold, so it was easy for the militants to escape into the jungles outside Gamgadi, 375 miles northwest of the capital, Kathmandu. Then, although the violence culminated in the Kathmandu bombing described in the Channel News Asia article (Terrorist Incident), it was followed on November 11 by the assassination of deputy superintendent of police in the town of Butwal.