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GUWAHATI, India, Dec 26 (AFP) - Bhutan's monarch has threatened to launch a military crackdown if Indian separatist rebels do not vacate their bases located inside the tiny Himalayan kingdom.

"Bhutan, today, faces a grave security threat from the presence of the armed Assamese militants who had illegally entered Bhutan and refused to leave," King Jigme Singye Wangchuk was quoted Wednesday as saying by the internet edition of government-run weekly newspaper, Kuensel.

"Bhutan will make every effort to resolve the problem through a process of peaceful dialogue," the king told a national day rally last week.

"If, however, the efforts and initiatives for a peaceful solution do not yield results and the Assamese militants refuse to leave the country, there will be no option but to send the security forces to remove them from Bhutanese soil."

The outlawed United Liberation Front of Assam (ULFA) and the National Democratic Front of Bodoland -- both fighting for independent homelands in the northeastern Indian state of Assam -- have their headquarters in Bhutan.

The rebels have operated out of Bhutan over the past three years, staging hit-and-run guerrilla strikes in Assam.

It is estimated that more than 4,000-armed rebels are operating from Bhutan, according to Indian officials.

The king said up to 80,000 people would have to be evacuated from parts of southern Bhutan if the kingdom's troops were to launch an offensive on the rebel bases.

"If an armed conflict breaks out in the country, it would create many problems for the government and bring immense hardship to the people," the king said.

"Members of the security forces, civil servants, businessmen, and people would face serious danger and many Bhutanese lives could be lost."

Earlier this year, ULFA leaders and top Bhutanese government officials held talks in Thimphu where the rebels agreed to shift their bases by December end.

Reports say the ULFA has already relocated at least four of its camps from Bhutan into adjoining Bangladesh.

More than 10,000 people have lost their lives to insurgency in Assam during the past two decades. 

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