The much-anticipated peace talks began in Phuket, Thailand, and further rounds followed in Thailand, Norway, Germany and Japan. During the talks both sides agreed to the principle of a federal solution and the Tigers dropped their long-standing demand for a separate state. This was a major compromise on the part of the LTTE, which had always insisted on an independent Tamil state. This also represented a compromise on the part of the government, which had seldom agreed to more than minimal devolution. Both sides also exchanged prisoners of war for the first time.