Thousands of people huddling around TV sets in a mosque courtyard in the provincial capital Banda Aceh clapped and cheered while watching leaders halfway around the globe sign the accord on Monday to end three decades of war.
But the crowd was subdued during most of the ceremony.
Rebel leaders immediately voiced concern about the thousands of government soldiers who will remain in the region while separatist fighters are forced to rapidly disarm under the eye of monitors from other Southeast Asian nations and the European Union.
The peace deal, which was propelled by the desire on both sides to smooth the flow of aid to victims of the 26 December tsunami, was signed in Finland on Monday by Indonesian Justice and Human Rights Minister Hamid Awaluddin and by Malik Mahmud, an exiled rebel leader who was briefly jailed in Sweden last year after Indonesia accused him of terrorism.
Both sides agreed to end hostilities immediately in the region of 4.1 million people at the northern end of Sumatra island.
"We just signed a commitment for peaceful settlement," Awaluddin said. "We aim to end violence and to begin a new life."
The agreement also provides amnesty for members of the Free Aceh Movement and gives the region limited self-government and control over 70% of the revenue from the province's mineral wealth, including oil and natural gas.
Leaders of the conflicting sides
signed the deal in Finland
Among the 3000 people who watched the live broadcast at Banda Aceh's biggest mosque, some expressed relief but remained wary.
"I can't predict what will happen now," said Nassruddin, 47, a high school physics teacher who goes by one name.
He said he had suffered enough. Like almost everyone, he knew people who were killed, kidnapped or disappeared during the war. Several years ago rebels targeted teachers, burning down schools.
"I only know we want to see an end to the fighting. We want prosperity and to feel safe," Nassruddin said.
In Jakarta, where the signing was also broadcast live, President Susilo Bambang Yudhoyono and other government members welcomed the agreement.
The accord became possible after the Free Aceh Movement (GAM) agreed to renounce its demand for full independence and to disarm.
In his state of the nation address on Tuesday, Yudhoyono pointed with pride to efforts to bring peace to Aceh.
Yudhoyono lauded the deal in his
state of the nation address
"The government places hope that the signing of the Memorandum of Understanding with GAM will become the starting point for a permanent conflict settlement in Aceh," Susilo Bambang Yudhoyono told parliament.
Yudhoyono used the forum of the speech - broadcast live across the sprawling archipelago and attended by diplomats, ministers and prominent Indonesians - to reject criticism that his government was giving foreigners too big a role in Aceh.
He said the administration would turn to bringing peace to Indonesia's other separatist hot spot, its easternmost province of Papua.
Indonesia's government agreed to cut the number of soldiers in the Aceh region from 35,000 to 14,700 and police from 15,000 to 9100. In addition, all major troop deployments must be cleared by Pieter Feith, a Dutch diplomat who will lead the 250-member international monitoring force.
Several other peace deals have collapsed, most recently in 2003, when the army drove out foreign observers, declared martial law and arrested rebel negotiators.
Still, despite the lingering distrust, most people agree that is the best chance for peace that Aceh has had in years.
Indonesia will reduce its troops
from 35,000 to 14,700 in Aceh
The need to rebuild after the tsunami, which killed more than 130,000 people in Aceh and left a half million homeless, created a strong impetus for Indonesia's government and the rebels to resume negotiations.
In return for the rebels dropping their secession demands, the government agreed to give them some form of political representation. Members of the GAM will be eligible to run in 2006 elections for a new regional chief and in 2009 polls for a new legislature.
Aceh also will be allowed to pass its own laws, collect taxes and have its own symbols, including a flag. Monetary matters, justice and freedom of religion will be controlled by the national government.