Kathmandu: Making arare exception for Nepal,the US Government has agreed to continue assistance to the Himalayan kingdomeven if the cabinet includes Maoist guerrillas, still branded as terrorists in Washington.

However, Washington warnedthat if the communist rebels entered the cabinet without abandoning violence,Maoist ministers would not be able to claim credit for US aid.

After days of deliberation, the US Department of Treasury'sOffice of Foreign Assets Control finally authorised the US Department of Stateand US Agency for International Development (USAID) this week to continueeconomic and development assistance to Nepal.

The USembassy in Kathmandu and USAID/Nepal hadrequested authorities to make the exception in view of US prohibitions againstproviding aid to terrorist organisations.

Washingtonsays the Maoists, "who continue to use violence, extortion, andintimidation", are terrorists.

Though the rebels signed a peace pact with the Nepalgovernment last year and began locking up their soldiers and arms under UNsupervision, reports of intimidation by the guerrillas continue.

Nepal'sElection Commission that began updating voters' lists to hold a key election byJune, Wednesday said the Maoists had seized revised lists in some areas,expressing their anger at the law that prevents people without land from beingregistered as voters.

A Supreme Court lawyer Wednesday said he had been threatenedby a Maoist leader for filing a case.

The Nepal Free Hotel Labour Union recently succeeded ingetting a number of hotels to impose an additional 10 percent service tax tocreate a fund for employees.

Lawyer Jyoti Banya who filed a public interest case againstthe decision said he was threatened by union chief Ramesh Pant to withdraw thesuit in two hours or face extermination.