The inner cometary coma is a weakly ionized plasma, and its structure and dynamics are governed mainly by ionization due to solar radiation and solar wind electrons and losses due to the radiative processes, recombination, and transport. At comet Halley a narrow ion density depletion region was observed by spacecraft as well as ground-based instruments and has been linked to the dynamics of the plasma and radiation. A model of the cometary plasma consisting of water group ions, bulk electrons, and energetic electrons produced mainly by photoionization is presented. The dominant losses in the inner coma are the radiation from the excitation of rotational and vibrational levels of water molecules and the recombination of the plasma. The electron energy losses due to these processes peak near 4000 K, and at temperatures higher than this value a localized cooling leads to further cooling arising from increased radiation loss and consequently to a thermal instability. The resulting increase in recombination leads to an ion density depletion, and the estimates for this depletion at comet Halley agree with the observations. This instability is sensitive to the plasma conditions and the transport processes, that is, diffusion and thermal conductivity. There is no direct measurement of the electron temperature in this range, and the electron temperature profile from MHD simulations has been used to develop a model of the inner cometary plasma, which yields the localization of the thermal instability and, hence, the observed ion density depletion region. The resulting electron temperature profile is also consistent with that obtained from the temperature dependence of the electron-ion recombination rate. ¿ American Geophysical Union 1996