The agreement is the most far-reaching peace deal ever concluded between the Indonesian government and the rebel Free Aceh Movement (GAM).

It calls for rebel troops to disarm and for non-local government forces to withdraw from Aceh, located on the northern tip of Indonesia's Sumatra island.

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

The Indonesian government and GAM say the agreement confirms their commitment to a peaceful, comprehensive and sustainable solution to the conflict, which has left nearly 15,000 people dead.

In the coming weeks and months, GAM rebels are to decommission their weapons and demobilise, while the government is to cut its police and army presence to 14,700 from nearly 40,000.

Political prisoners will be released.

Under the final stage of the agreement, local political parties can be established in Aceh, including those representing what has been, until now, the Free Aceh Movement.

The deal, signed in the Finnish capital, Helsinki, on Monday August 15, was reached after five rounds of talks mediated by Finland.

World leaders welcome leap of faith

The international community has hailed the agreement, with the United States praising Jakarta and Aceh rebels for their "vision and courage to seek lasting peace."

The United Nations secretary-general, Kofi Annan, has described the deal as "comprehensive."

In a statement, Mr Annan said he hopes the agreement can be implemented in full so lasting peace will prevail in Aceh.

Finnish mediator, Martti Ahtisaari, who brokered the accord, says it constitutes a "leap of faith."

He says it was always going to be difficult to create peace after such long conflict.

"You can't build confidence and trust after so many years," he said.

"My only hope is that the parties can start tolerating each other."

Australia's foreign minister, Alexander Downer, has praised the Indonesian government for bringing about the agreement.

"I know so many of the Indonesian ministers, and the president, who have been involved in this and I know they've approached this issue with goodwill," he said.

The European Union's top foreign policy official, Javier Solana, has expressed hope the deal will pave the way for the rebuilding of Aceh after the tsunami disaster.

Lingering tensions

Thousands of people gathered at Aceh's main mosque in the capital, Banda Aceh, to watch the signing, which was broadcast live from Finland on television.

As the signing occurred, large sections of the crowd cheered and applauded and flashed peace signs.

But many in Aceh remain wary.

Rebel leaders have expressed concern over the 14,700 government troops who will stay in Aceh, tasked with the external defence of the province.

The Free Aceh Movement's Malik Mahmud says there will be about twice as many troops in Aceh than any other part of Indonesia.

It "does not create confidence in TNI's intentions," he said, referring to the Indonesian military.

There are also fears that pro-Jakarta militias could undermine the peace process.

GAM spokesman, Bakhtiar Abdullah, says 10,000 proxy militias associated with the Indonesian army are active in Aceh and are threatening to kill rebels after they disarm.

Mr Abdullah says the government denies the militias exist.

Third time lucky?

Aceh rebels launched their uprising to create an independent Islamic state in 1976, accusing Jakarta of exploiting the resources of the Muslim-majority province.

Two previous truces have fallen apart.

In May 2000, peace negotiations resulted in a ceasefire that collapsed in less than a year amid ongoing violence.

The armed forces then launched an offensive that saw the death toll in the province rise and both sides accused of massacres.

Military operations were stepped up in May 2003 after the collapse of a second truce prompted the government to impose martial law, with Jakarta relying on both its own troops and local proxy militias.

The latest peace deal was reached after both sides were prompted to renew negotiations after a tsunami on December 26, 2004 that devastated large parts of Aceh, leaving 170,000 Acehnese dead or missing and 500,000 homeless.