"In a technical sense the Aceh separatist movement has no more meaning because we have occupied all their bases," Major General Endang Suwarya, the martial law administrator for Aceh, was quoted as saying by the state Antara news agency on Saturday.
But he said many Free Aceh Movement (GAM) rebels have mixed with the civilian population, making it difficult for security forces to search for them.
Operation to continue
The Indonesian military is in the fourth month of an all-out offensive to wipe out GAM. A rebel spokesman had previously denied the military's claims.
Armed Forces commander General Endriartono Sutarto recently said the military operation -- Indonesia's biggest since the 1975 invasion of East Timor -- will continue as long as GAM poses a security threat.
Officials had previously said they hoped to wind down in six months or less after the operation, which began on 19 May.
In the latest violence Zulkifli, 25, died during a firefight on Friday with government troops in Aceh Besar district, said Lieutenant Colonel Ahmad Yani Basuki, adding that troops seized a machete, cable and a battery from the dead man.
"In a technical sense the Aceh separatist movement has no more meaning because we have occupied all their bases"
Major General Endang Suwarya. Martial Law Administrator, Aceh
A farmer, Muhammad Saleh Sulaiman, 55, was shot dead in Bireuen district on Friday night, Basuki said.
He blamed GAM for the attack. The rebels have denied targeting civilians.
Elsewhere in Bireuen, residents found the body of a Javanese migrant who had been shot in the head, Basuki said.
The military said it has seized 344 weapons from the more than 800 rebels who have been killed during the offensive. Another 1,700 rebels have been arrested or have surrendered, the military said.
At the start of the offensive the military said close to 40,000 police and soldiers were confronting about 5,000 rebels.
Indonesia's military says it is trying to avoid rights abuses in Aceh but the country's human rights commission has said the military appears to be failing in its stated aim of winning the people's hearts.
The rights commission accused the military of extra-judicial killings.
GAM has also assassinated people and engaged in extortion, arson and hostage-taking, the International Crisis Group think-tank has said.
The rebels have been fighting for an independent state in northern Sumatra since 1976.