Probably the largest of the non-Burman ethnic groups of Burma, the Karen took up arms against the central government after Burmese independence in 1948. The Karen National Union (KNU) had been formed in 1947 from Karen organisations that boycotted elections for a constituent assembly and so were not a part of Burma's constitution-making process. By the late 1950s all the main ethnic minority groups had taken up arms against the government.

The Burmese military has held power directly or indirectly since 1962. In 1988, the State Law and Order Restoration Council (SLORC) military junta seized power to crush a popular uprising. Multiparty elections were promised, but the apparent winner, the National League for Democracy (NLD) of Aung San Suu Kyi, was denied power. The crackdown on pro-democracy forces drove a new generation of anti-government activists to flee to the border area, especially the area held by the KNU. This led to the establishment of the Democratic Alliance of Burma (DAB), a 'post-88' alliance of pro-democracy exile organisations and ethnic insurgent organisations. The DAB comprised most of the members of an earlier alliance of armed ethnic organisations, the National Democratic Front (NDF), together with several pro-democracy groups that supported the armed struggle or had taken up arms (chiefly the All Burma Student Democratic Front). Until a military offensive by the SLORC in January 1995, these alliances centred on Manerplaw, the headquarters for the KNU and the capital of the self-proclaimed Karen state of Kawthoolei. The KNU's Chairman, General Bo Mya, headed the DAB as well as the National Council of the Union of Burma (NCUB), the umbrella organisation comprising the DAB, NDF, Members of Parliament Union and National League for Democracy–Liberated Area.  

Early peace talks between Karen insurgents and the government failed in 1949, 1960 and 1963, in the last case resulting in a ceasefire by one Karen group denounced by the KNU as 'a surrender'.

From the mid-1980s the Burmese army began to push towards the Thai border, challenging ethnic insurgents' ability to control the border area and the cross-border trade that largely financed their war. In 1989 the SLORC pioneered a strategy of negotiating bilateral ceasefire agreements without political dialogue, agreeing truces with the various ethnic armies that had been commanded by the crumbling Communist Party of Burma. The SLORC's new leaders developed a second phase of the ceasefire strategy after 1992 to split the ethnic organisations away from the post-1988 alliance. For example, a ceasefire agreement was reached in 1993 between the SLORC and the Kachin Independence organisation (KIO), a leading member of the DAB, in defiance of DAB policy that demanded that the SLORC negotiate a national ceasefire and political settlement with the DAB collectively. The KIO ceasefire was strongly condemned by the DAB leadership as a betrayal.

With the SLORC continuing to gain the upper hand militarily, displacing much of the Karen civilian population, the semi-ceasefire that emerged in late 1992 gave the KNU opportunity to review the situation.

The KNU's decision-making structure is that of a one-party state, topped by a periodic party congress. Between congresses the party is led by a Central Committee and an Executive Committee. The congress is 'selected' to represent the seven administrative districts making up the state of Kawthoolei, each headed by a District Chairman. Until the military defeat of 1994-95, the KNU also formed a Kawthoolei government, with the post of Prime Minister held by the KNU General Secretary. The KNU's army, the Karen National Liberation Army (KNLA), is a parallel command structure of seven military brigades each headed by a Brigade Commander and subject, in theory at least, to the KNU's Defence Minister (a post long held by KNU Chairman General Bo Mya). These parallel structures, overlapping but not entirely coinciding, afforded the opportunity for distinct factions to develop within the KNU-Kawthoolei-KNLA leadership with somewhat distinct outlooks and constituencies.

For the younger, middle-level section of the KNU leadership it became clear that the burden of the conflict had become unbearable for the Karen population in the conflict area. This group viewed the KIO decision sympathetically, feared the consequences for the Karen of further erosion of the KNU's military position and regretted the DAB's lack of understanding concerning the need for the ethnic armies to try to end the fighting in their areas. Meanwhile, reports of SLORC human rights abuses in Karen areas were being used by the NCUB to further undermine and discredit the SLORC and mobilise stronger international responses. However, there were foreign visitors to the KNU who urged the KNU to consider a strategy of minimising the impact of SLORC military superiority by entering a ceasefire and relying on a more political strategy. There were also Karen leaders from inside Burma who visited the KNU as self-appointed 'mediators', urging the KNU to try to find a way to end the war. These non-KNU Karen 'mediators' were treated as SLORC stooges and given a very cool reception officially by the KNU leadership although receiving quiet encouragement from the pro-ceasefire faction.

In 1994 an officially sanctioned KNU working group – initiated by those responsible for the KNU's foreign relations – won support within the KNU to explore a negotiation initiative on the basis of the political advantage in being seen to be willing to 'talk about talks'. Plans were laid for a delegation to go to Rangoon in the hope that such an initiative could win international support. The intention was to mobilise international pressure for a new approach to the SLORC, recognising the need to open up some of the political issues (i.e. equal rights, the right to self-determination and a move leading towards federalism) for discussion, rather than simply demanding the removal of the SLORC (as the NLD's National Coalition Government of the Union of Burma was doing) or limiting discussion to a military ceasefire (as the KIO had done). This move collapsed late in the year when NCGUB leaders in New York pleaded with the KNU leadership not to make such a move, which they saw as undermining their own efforts at the UN to win decisive international action against the SLORC.

Long-standing grievances of Buddhist elements in the Karen population (which in the conflict area is substantially non-Christian) against the mainly Christian KNU leadership erupted at almost exactly the same time and the SLORC quickly moved to fuel the split. The formation of the Democratic Buddhist Karen Army (DKBA) led to a major SLORC-DKBA military offensive against the KNU and in early 1995 the KNU headquarters at Manerplaw fell. Afterwards, DKBA and SLORC forces continued to attack the KNU alleging its use of refugee camps inside Thailand as sanctuaries. The conflict's spillover into Thailand caused great concern to the Thai authorities and those providing care for the refugees. Thai pressure on the ethnic armies in the border area (the Karen, the Karenni and the Mon) to negotiate increased. Pressure on the Mon led to another key DAB member, the New Mon State Party, agreeing to a ceasefire in 1995.

In 1996, the militarily hard-pressed KNU moved towards ceasefire talks. The moves followed a congress in which pro-talks middle-level leaders were seen by General Bo Mya to be challenging his predominance, and came against the backdrop of urgings from a SLORC-backed group of 'mediators' and in the face of strong alliance pressure . This time several rounds of talks were held but broke down. The collapse of the talks can be attributed to hard-line KNU leaders' representation of the SLORC's position as amounting to a demand to surrender, which mobilised grassroots Karen opposition to a ceasefire (something that had not happened in the case of the KIO and the Mon).

A new SLORC military offensive followed in 1997 in which the KNU lost virtually all the rest of its territory. The long-standing hard-line President of the KNU, General Bo Mya, was displaced to the position of Vice President, but retained his position as Defence Minister and also remained Chairman of the DAB and the NCUB. Ostensibly his displacement by long-time General Secretary Saw Bathin opened the way to a new KNU stance, but it could not hide the fact that the militarily-weakened KNU was now in an even weaker negotiating position. With Bo Mya still casting a wide shadow over the KNU, and with the discrediting of 'talks' in 1996, it was difficult in KNU circles to advocate more ceasefire talks.

In the wake of the military offensive in 1997 and the hardening of Thai attitudes towards providing refuge, the situation inside Karen areas deteriorated with increasingly large numbers of internally displaced persons (IDPs). Those KNU leaders who in 1993-94 had advocated a ceasefire strategy were now preoccupied with trying to find humanitarian assistance for civilians. Reporting on the IDP situation led in some cases to renewed advocacy on the need for an end to the fighting.

A new process of dialogue between the renamed SLORC – the State Peace and Development Council (SPDC) – and Aung San Suu Kyi began to develop from late 2000. Hopes for real dialogue remained high during 2001 and 2002, and the KNU (and alliance circles) emphasised the need for 'tripartite dialogue' between the regime, the NLD and 'ethnic forces', though the ethnic struggle undoubtedly continued to be overshadowed by the democracy issue.

Intermittent contacts between the KNU and the SPDC continued during this period while Thai pressure, in the form of the restriction of Burmese opposition groups' movement in Thailand, continued to intensify. During 2003, efforts to persuade the KNU to again try negotiation were renewed by the SPDC-backed mediator group and independently by other Karen community leaders.

Under intensifying international criticism, in August 2003 the SPDC announced a 'roadmap' for transition to democracy, the first step of which would be re-convening the National Convention, a constitution-drafting process initiated in 1992 but stalled since 1996. While international efforts were concentrated (unsuccessfully) on securing the involvement of the NLD, the SPDC sought participation of key ethnic communities, especially ethnic ceasefire groups. This, and perhaps parallel Thai persuasion, seems to account for a surprise visit by Bo Mya to Rangoon at the invitation of the SPDC, where he made a 'gentleman's agreement' ceasefire in December 2003. Perhaps it was thought that a quick ceasefire would lead to KNU participation in the Convention. The sudden change of position by Bo Mya has given weight to those in the KNU who have long advocated a negotiations policy, but it has not yet neutralised those more in line with 'alliance policy' that opposes a KNU ceasefire.

A KNU negotiating team subsequently met with the SPDC negotiators on two occasions, but remained essentially at the confidence-building stage and made only nominal progress against the backdrop of the uneasy 'gentleman's agreement', which elements on both sides were inclined to want to disregard. With little progress occurring, talks were suspended while the Convention was in session and efforts to reconvene the talks met a series of delays from both sides. When a KNU delegation arrived in Rangoon in October 2004, a new round of talks was engulfed by the political crisis caused by the removal of Burmese Prime Minister Khin Nyunt and the purge of the Military Intelligence apparatus that was his power base and had made up the SLORC/SPDC ceasefire negotiators.

In the case of the KNU conflict with the military government of Burma, there are groups on both sides who are willing to attempt to find a negotiated settlement. However, the credibility of such elements in the SPDC has been severely eroded by the predominant hard-liners who appear unwilling to make any concessions to anyone or to hold serious dialogue. At recent talks with the KNU, the SPDC's hard line quickly eroded early potential for problem-solving talks. This had the effect of undermining the position of those in the KNU who were willing to work seriously to achieve a ceasefire and reinforced the position of KNU hard-liners who do not consider a ceasefire necessary or attainable.

Despite this there is no change in the KNU mindset regarding ceasefire talks. At the KNU Congress in late 2004 it was unanimously agreed that the ceasefire process should continue. With the consent of the KNU Central Committee, the KNU Chairman wrote a letter to Senior General Than Shwe on 15 November, inquiring about the SPDC's attitude regarding the resumption of a process of ceasefire talks. In response, SPDC Lt. Col. Kyaw Soe of Army Security Command acknowledged receipt of the KNU letter in a letter dated 11 January 2005. It also stated that discussions were being held on the continuation of a peace process with the KNU, that the prospects were bright, and that arrangements had been made for an informal meeting for peace in Moulmein, the Headquarters of the Southeast Command. It stated that, if willing, a KNU delegation could proceed to Moulmein. The KNU General Secretary responded by conveying a letter to the Commander of the SPDC Army Security Command (with copies to both the commander of the Southeast Command and Kyaw Soe) expressing the KNU's satisfaction with the SPDC's responses and willingness to have an informal discussion.

The KNU's current stance in favour of agreeing a ceasefire and engaging the SPDC in talks is the product of a long process of internal debate and political manoeuvring on the costs and benefits of such a strategy. A number of inter-related factors can be identified that have tilted the scales in either direction at different times:

• Individual leaders' changing analyses of the situation play a decisive role: it should be noted that the viewpoints and membership of pro- or anti-ceasefire factions are not static.
• Concern about the effects of the conflict on the civilian population has shaped attitudes to engagement. Also, different KNU factions' abilities to present the case for or against engagement to grassroots supporters have been important determinants of strategy.
• Interpretations of the KNU's worsening military situation have differed: variously suggesting a ceasefire (in order to neutralise the government's military advantage) or continued fighting (because the unfavourable negotiating position undermines the value of negotiating).
• International influences have been an important factor, with Thailand's increasing discomfort with the conflict and concurrent willingness to hinder the KNU's military strategy being an important push towards a ceasefire approach.
• Perceptions of the trustworthiness of counterparts and intermediaries and the credibility of past engagements were other important factors.
• Membership of broader opposition groupings and alliances has played a role in the KNU's decision-making, reinforcing certain factions' power (especially because of overlapping leadership arrangements), and usually inveigling against engagement with the ruling regime. The existence of a high-profile pro-democracy movement that has overshadowed the Karen cause internationally has also played a role in KNU thinking.