The deal, signed in Helsinki by Indonesian Justice Minister Hamid Awaluddin and Malik Mahmood of the Free Aceh Movement (GAM), provides for an amnesty and disarming of the rebels and restricts government troop movements in Aceh.

Talks were prompted by the 26 December tsunami that laid waste to the province on Sumatra island, with 170,000 dead or missing.

The breakthrough came when the GAM dropped demands for independence and Jakarta agreed to let it participate in local politics.

Disarmament

Disarmament begins on 15 September and will be monitored by officials and soldiers from the European Union and Asia.

The deal restricts government
troop movements in Aceh

Finnish mediator Martti Ahtisaari hailed it as the "beginning a new era for Aceh", whose people had a chance to "live their lives in a peaceful, just and democratic society".

The Indian Ocean disaster prompted negotiations that resulted in GAM dropping its historical demand for independence and Jakarta agreeing to let the rebels enter local politics.

"In Aceh, we feel that this new (Indonesian) government is sincere in its desire for peace, whatever the motive is," GAM negotiator Mohammad Nur Djuli told Reuters before the ceremony.

Reconstruction

Successful implementation of the truce in one of Asia's longest-running conflicts could smooth the way for a $5 billion internationally backed reconstruction programme in Aceh.

Free Aceh Movement chairman
Malik Mahmood is positive

It may lure investors looking for stability in the world's fourth most populous country.

The peace deal entitles Aceh to a bigger share of revenue from its oil and gas reserves. 

Jakarta and the GAM have blamed each other for sporadic clashes in the province since the deal was agreed on last month. Military officials said one rebel was killed on Saturday.

But the GAM says its fighters will start laying down weapons immediately.
 
"We are still very worried about the possibility of the Indonesian government not being able to control the military. But we have to have some faith," Nur Djuli said in an interview.

History of revolt

In Aceh many are unaware of the peace process or too busy rebuilding from the tsunami that left 500,000 people homeless in the devoutly Muslim province of 4 million people.

Talks were prompted by the
December tsunami

"I'm not sure whether I should be optimistic or pessimistic about this agreement. The Acehnese have been suffering for far too long," says Zulfikar, 17. 

The pact stipulates the Indonesian military cannot move more than a platoon of troops at a time in Aceh without informing foreign monitors, according to a copy obtained by Reuters.

The province, on the northwest tip of Sumatra island, has a long history of revolt against Jakarta and Dutch colonial rule.

Unarmed monitors

Monitors face a tough task ensuring the warring sides avoid a return to fighting, which sank previous talks.

Finnish Foreign Minister Erkki Tuomioja said there would be 250 unarmed monitors from the EU and five Asian nations, though it is not clear what they could do about any violation of the truce, which calls for the GAM to disarm over three months from September and for Indonesia to withdraw the bulk of its troops.

Mariana, 32, a housewife who lives near the main provincial airport in Aceh, was cautious about the prospects for peace.

"They have said they had an agreement before, yet there were still gunbattles and they killed people," she said.