Jose Zapetero president of the government has assures reporters that the ceasefire is holding and that reports of extortion come from a time before the ceasefire was declared.

All paries now appear to be optimistic for a way forward in the Basque country except for the opposition party the PP.

The right wing party the PP has reiterated its plea to not negociate with the terrorists.

The PP have a history of opposition in the Basque country. In 2004 they lost the general election to Zapetero after blaming the Madrid bombings on ETA.

The news of the ceasefire should still be viewed with caution, neither side may be in a position to guarantee either peace or autonomy, although it is to be hoped that now dialogue is in place the situation will rapidly change.