  We construct spacetime supersymmetric, modular invariant partition functions
of strings on the conifold-type singularities which include contributions from
the discrete-series representations of SL(2, R). The discrete spectrum is
automatically consistent with the GSO projection in the continuous sector, and
contains massless matter fields localized on a four-dimensional submanifold at
the tip of a cigar. In particular, they are in the 27+1 of E6 for the E8 x E8
heterotic string. We speculate about a possible realization of local E6 GUT by
using this framework.
