Parliament passed delayed Aceh government law 11 July providing provincial control over all matters except defence, security, national development planning, justice, foreign affairs, finance, conservation and some religious political parties; they face dissolution if convicted but verdict not expected until after election. UN criticised Thaksin caretaker government’s decision to extend emergency decree granting extraordinary powers to police and military in south. 6 killed in clash between police and militants after attack on police checkpoint in Pattani. Schools closed in Narathiwat 24 July after teacher killed in armed attack.

Radical cleric Abu Bakar Ba’asyir, former leader of Jemaah Islamiyah, released after serving 26 of 30-month sentence. Human rights groups raised concerns over enactment of district-level regulations inspired by Sharia law and which may discriminate against women. 56 MPs signed petition urging head of parliament to write to president requesting these be revoked, while 134 MPs signed counter- petition. EU unlikely to extend Aceh Monitoring Mission beyond September but will send election observers to monitor local polls, doubtful before November. Concerns in Aceh that draft Aceh government law, to be passed July, does not sufficiently reflect spirit or letter of August 2005 Helsinki peace accord.

State of emergency declared in Yogyakarta after 5.9 magnitude earthquake 27 May killed 6,000 and displaced 650,000. Draft law on Aceh governance still being debated in parliament with human rights provision, extent of Islamic law application and other issues unresolved. Thousands protested delays, calling for quick approval to allow provincial elections - now not likely before 15 September. EU-led Aceh Monitoring Mission’s mandate extended until mid-September to oversee polls. Dissension within GAM reportedly growing over election participation. Relations with Australia thawed after Papua asylum issue tension; FMs Wirayuda and Downer met 15 May and announced Indonesia’s ambassador, recalled in March, would return to Canberra. Tensions remained in Papua: trials of suspects in Abepura riots began 17 May. In Central Sulawesi, police arrested several men led by JI member on suspicion of October 2005 beheading of 3 Christian schoolgirls; later aired taped confession. Further trials in connection with 2005 Bali bombs began 9 May.

Unrest continued in Papua with 10 April attack on army in Keerom regency blamed on Free Papua Movement rebels; 4 killed. Diplomatic relations soured with Australia as Jakarta accused Canberra of meddling in internal affairs by giving 42 Papuan asylum-seekers temporary visas in March. Parliamentary discussion continued past initial 31 March deadline on draft Law on Government in Aceh - key element of peace process - delaying gubernatorial elections in province. VP Jusuf Kalla said polls, originally scheduled for April, may be held in August if parliament passes bill in May, and asked for EU- led Aceh Monitoring Mission to remain for elections. 2 Free Aceh Movement (GAM) leaders previously in exile, including designated GAM PM Malik Mahmud, in 19 April Aceh visit. Timing of possible execution of 3 Catholics in Central Sulawesi for involvement in Poso conflict remains unclear; Supreme Court formed panel of judges to consider reviewing case. Police raid on house in Central Java 29 April killed 2 accomplices of wanted militant Noordin Top.

Jakarta increased security presence in eastern province of Papua amidst increasing unrest. Violent protests erupted in Timika, Jayapura and Jakarta, demanding closure of Freeport mine due to concerns over local land rights and environmental degradation. 4 police and airforce officer killed in 16 March clash with protesters in Jayapura. Parliament missed 31 March deadline for approval of law on Aceh autonomy. Aceh Monitoring Mission scaled down as half foreign monitors withdrawn, rest to remain until 15 June. Government launched new reintegration program in Aceh late March involving cash disbursements to former GAM combatants and militia for economic empowerment projects, but questions raised over accountability mechanism. Supreme Court reinstated 10-year verdict for former East Timorese militia leader Eurico Guterres; all other defendants acquitted.

Draft bill on Aceh governance under consideration in parliament; key issues include participation of independent candidates in local elections scheduled for June and formation of local political parties. Target deadline for new law 31 March. EU/ASEAN Aceh Monitoring Mission extended for 3 months (until 15 June). Diplomatic tension with Timor Leste eased after President Susilo Bambang Yudhoyono met President Gusmao Xanana to discuss UN-backed report on Indonesian human rights violations in former province. Deadline for decision on legal status of West Irian Jaya province passed 20 February without resolution. Heavy sentences on terrorism charges handed down in Ambon: Asep Jaja, man who led attack on paramilitary police post in May 2005, sentenced to death, while 2 others given life in prison. Mostly peaceful demonstrations against Danish cartoons took place throughout country.

Peace process entering difficult phase after smooth GAM decommissioning and withdrawal of “non-organic” security forces. Divisions appeared in GAM over reintegration funds not reaching lower ranks. Government submitted draft of new Aceh governance law to parliament on 26 January: degree to which final law adheres to Helsinki agreement will be crucial test of good faith. Vice President Kalla met GAM leadership in Finland to evaluate implementation of peace process. EU announced extension of Aceh Monitoring Mission until 15 June 2006. Police arrested 10 suspected of assisting terrorist mastermind Noordin M. Top; 6 formally charged. Apparent failed assassination attempt against Poso police chief second direct attack on police in Poso since October. 8 suspects arrested 11 January in Timika, Papua, for involvement in August 2002 fatal attack on convoy of American-owned mining company. Security forces fired on civilians in Paniai, Papua, killing 1, 20 January; National Human Rights Commission conducting investigation.

Aceh peace process continued smoothly but major hurdles on horizon while bloodshed continued in Central Sulawesi. Final phase of 24,000 non-local troop withdrawal from Aceh began 20 December, while former rebels handed over last of weapons. GAM announced its Acehnese National Army to be dissolved and replaced with non-military committee designed to oversee GAM’s transformation into political movement. Move greeted with scepticism by Indonesian military, which announced plan to send 15 engineering battalions to help with reconstruction; GAM expected to protest to Aceh Monitoring Mission. At least 7 killed by bomb in predominantly Christian market in Palu, Central Sulawesi, 31 December. Attack came after plans to execute Florinese Catholic and 2 others for role in May 2000 massacre of over 100 Muslims, raised concerns of renewed unrest.

Aceh peace process continued: GAM ended third round of disarmament program 22 November, again handing over required weapons. Violence continued in Poso with 2 more schoolgirls (1 Christian, 1 Muslim) shot in head, both survived: but no new conflict. Malaysian bomb-maker Azhari Husin, suspected chief technician behind Bali bombs, killed in East Java police operation 9 November. Noordin Mohamad Top, main strategist behind JI attacks, remains at large. Police identified all 3 suicide bombers from October attacks, 2 from West Java and 1 from Central Java. 42 indigenous Papuans inaugurated as members of long-awaited Papuan People’s Council (MRP) 31 October by Interior Minister Mohammad Ma’ruf. Meetings between central government, leaders of MRP, Papuan and West Irian Jaya provincial government leaders 24-25 November resulted in agreement to settle legal status of controversial new province. U.S. State Department lifted Congress-approved arms embargo against Indonesia. Crisis Group South East Asia Project Director Sidney Jones refused entry to country 24 November, but allowed to return within week.

1 October Bali blasts killed 23 and wounded 146; police circulated photos of 3 suicide bombers but produced no leads. Vice President Jusuf Kalla expressed need to monitor particular Islamic boarding schools as part of effort to control extremist ideology. Tensions sharply raised in Poso, Sulawesi, after 3 Christian schoolgirls beheaded 30 October. Indonesian military completed second of 4-phase Aceh pull-out: approximately 12,000 troops and 2,500 police have now left province; in return GAM surrendered 476 weapons. Government disbursed initial payment of $100 per GAM combatant early October in block sums to local GAM commanders to distribute; precise mechanism to demobilise and assist 3,000 GAM fighters remained uncertain. Establishment of Papuan People’s Council scheduled for 15 October further delayed, prompting interior ministry to announce will press ahead with gubernatorial elections.