This paper argues that the dimension of territory or space is indispensable to a development strategy and that regions, as the platform for human society rather than artificial division between rural and urban, should provide the unit of analysis in the development process. While macro-level reforms can provide a sound policy framework and effective incentives, it is at the regional level that appropriate interventions can be identified and implemented. This paper suggests a general framework for such an approach, and illustrates it through a case study of a district in Nepal where conscious efforts have been made to improve linkages between rural and urban areas through the Rural Urban Partnership Programme, RUPP.