  The decay mode D^0 -> K^0 \bar{K^0} has no factorizable contribution. We
calculate the nonfactorizable chiral loop contributions of order O(p^3)and then
we use a heavy-light type chiral quark model to calculate nonfactorizable tree
level terms, also of order O(p^3), proportional to the gluon condensate.
Calculated chiral loops and the gluon condensate contributions are of the same
order of magnitude as the experimental amplitude.
