Hongkong – Despite feeling uneasy over the recent political turmoil in Indonesia, the head of the International Monetary Fund yesterday said he was willing to work with any new policymakers chosen by the nation.

Hamish McDonald – As Megawati Sukarnoputri edges closer to assuming the Indonesian presidency, she has given some signs of a more conciliatory approach to Australia and breakaway East Timor than indicated so far by her huffy nationalist stance in public.

Hamish McDonald – Warning of a new financial crisis in Indonesia, the Federal Opposition yesterday urged a softer approach by international lenders to the country's huge debt burden left by the collapsed Soeharto regime.

Reuters in Sydney – With President Wahid fighting for his political survival and his supporters vowing to lay down their lives for him, aid agencies are preparing for a humanitarian crisis.

Jeremy Hobbs, executive director of Oxfam Community Aid Abroad, said the Australian charity already had contingency plans for a humanitarian catastrophe.

Medan – The Medan District Court, under heavy security, began on Thursday the trial of Ligadinsyah, alias Azis bin Ibrahim Linggo, believed to be the deputy commander of the Free Aceh Movement (GAM) for the Central Aceh area.

Bogor – There was a second explosion at the house of the parents of Budiman Sudjatmiko, chairman of the People's Democratic Party (PRD), in the village of Sukaresmi here on Thursday, following an explosion a day earlier.

Washington – The United States said it was watching events in Indonesia closely as it faces a test to its democracy, and called on the country's leaders to solve its political crisis through peaceful, constitutional means.

US State Department spokesman Philip Reeker told reporters that Washington was "watching events in Indonesia very closely".

By Tim Anderson for AID/WATCH

1. World Bank dictating terms of development in East Timor

Banda Aceh – Fifteen people were killed or found dead in two days in Indonesia's troubled Aceh province, as rebels and the military traded accusations over the torching of scores of homes, authorities and residents said Thursday.

Brendan Pearson – East Timor's bounty from Timor Gap oil and gas revenues may hit $US1 ($1.95 billion) billion annually this decade, East Timor's interim Foreign Minister, Dr Jose Ramos Horta, said yesterday.

Mark Dodd, Dili – A dispute over illegal trade on the East Timor border with Indonesian West Timor is thought to have caused a series of grenade attacks on Tuesday that left at least five people dead and about 40 injured, United Nations military sources say.

Jakarta – Indonesia's intelligence agency has named a prominent Australian academic as a potential security threat, in the latest sign of the Megawati government's heightened sensitivity to criticism ahead of the July presidential election.

Jakarta – Some 10,000 supporters of President Abdurrahman "Gus Dur" Wahid occupied on Wednesday the office of Situbondo local administration in East Java, paralyzing government activities in the coastal town.

Surabaya – Security forces fired warning shots into the air in an attempt to disperse thousands of supporters of President Abdurrahman Wahid who tried to forcibly enter the provincial legislative council building here on Tuesday.

Max Lane, Jakarta – If opponents of President Abdurrahman Wahid have their way, when it meets on May 30 the Indonesian parliament will call a special session of the People's Consultative Assembly, the only body which has the power to impeach and oust the president, for as early as late July.

Jakarta – A day ahead of the much-anticipated plenary session of the House of Representatives (DPR), thousands of President Abdurrahman "Gus Dur" Wahid supporters staged a protest at Monas (the National Monument) in Central Jakarta on Tuesday.

Max Lane, Jakarta – More than 500 people, Acehnese and Indonesians, attended a series of lively debates and cultural events at conference organised by the Acehnese People's Democratic Resistance Front (FPDRA) and the Popular Youth Movement (GPK), a youth organisation in political solidarity with the People's Democratic Party (PRD), held May 18-20.

London – Human rights abuses emerged in East Timor last year amid delays in rebuilding the territory after the bloody destruction carried out by Indonesian forces, Amnesty International said Wednesday.

Mark Dodd, Dili – East Timor In an effort to mend an economy devastated by the violence that accompanied the Indonesian withdrawal in 1999, the United Nations transitional administration in East Timor is trying to get the American dollar widely accepted as the only legal tender.

The death toll in yesterday's attack along the border between East and West Timor has reached five, with up to 40 people injured, the United Nations Transitional Administration in East Timor (UNTAET) confirmed today.

Jakarta – Pro-democracy activists, alarmed of strong signs of a reappearance of the military within politics, warned the Indonesian Military (TNI) on Monday not to enter the political contest, saying that this would be the biggest contribution it could make to democracy.

A group of GNR (Guarda Nacional Republicana) [a security arm of Civpol], on Monday, fired warning shots at a group of RDTL supporters and activists at the border of Metinaro and Manatuto. Sixteen people were injured in clashes with the GNR and seven are receiving treatment at the Baucau General Hospital.

Jakarta – The city's hospitals are struggling to admit new patients and are having a hard time treating existing ones because a collapsed dike has caused a shortage in clean water supplies.

Surabaya – East Java authorities have stepped up precaution measures in anticipation of possible unrest resulting from the heightened tension between members of political elite in Jakarta.

Governor Imam Utomo called a crisis meeting with Brawijaya Military commander Maj. Gen. Sudi Silalahi, provincial police chief Insp. Gen.

Mark Dodd, Gleno – Ironically, it is neglect which has produced independent East Timor's first major export crop: world-class organic, forest-grown coffee.

Jakarta – Hundreds of enraged supporters of beleaguered Indonesian President Abdurrahman Wahid on Monday attacked buildings linked to rival politicians and burned tyres in the cleric's stronghold of East Java, local Metro TV reported.

Lindsay Murdoch, Jakarta – Abandoned by almost all of Jakarta's political elite, some of whom think he has lost grasp of reality, Abdurrahman Wahid is showing there is little he will not do to remain president.

Jakarta – A key independence leader in Indonesia's remote Irian Jaya province told a court trying him for alleged subversion Monday that the province was already independent, his lawyer said.

"Theys Eluay told the court that the state of Papua has existed since December 1, 1961," defence lawyer Anum Siregar, using the locally-preferred name for the province, told AFP.

John McBeth, Jakarta – The Indonesian military is in a sorry state at a bad time. Many of its aircraft can't take to the skies, most of its ships are stuck in port and spare parts and technical assistance are hard to find. Poor logistics and maintenance only add to the catalogue of problems.

Marianne Kearney, Jakarta – Indonesia's six-week-old crackdown on Aceh's separatist rebels is as bad as any experienced during the worst years of the military operation conducted under the rule of former President Suharto, residents say. But the bloodshed has done little to dent the separatist movement or to capture the "hearts and minds" of the Acehnese people.

Jakarta – Illegal loggers are suspected of moving border posts between Indonesia and Malaysia in the rainforests of Borneo island, causing Indonesia to lose some territory, the government said yesterday.

Jakarta – Deputy Speaker of House of Representative (DPR) for Political and Security Affairs, Sutardjo Surjoguritno, and House Commission II received representatives of organizations that demand the DPR disband Golkar Party today.

Mark Dodd, Dili – Only 5 per cent of East Timorese understand the purpose of the United Nations-organised election to be held on August 30, a voter education survey released yesterday found. Most thought they would be choosing a president rather than an assembly.

Jon Land – The World Bank has been prominent in East Timor's transition to full independence – so prominent in fact that the country now faces a looming struggle about whether the institution's neo-liberal economic model, so renowned for the hardship it has caused other poor countries, will be imposed on East Timor too.

Hestiana Dharmastuti/HD, Jakarta – On Wednesday, around 200 workers came to the Vice President Palace. They are demanding the disbandment of the Labour and Transmigration Ministry. Besides that, they are demanding to withdraw the Minister of Labour and Transmigration decree, (Kepmennakertrans) Number 78/Men/2001.

Banda Aceh – Four people, including two rebels and a soldier, were killed in the latest violence in Indonesia's Aceh province as clashes continued between separatist rebels and government troops, a report said here Wednesday.

Derwin Pereira, Jakarta – Indonesia's military chief Admiral Widodo Adisucipto, seeking to defuse tensions that could trigger sporadic violence across the archipelago, called on the country's squabbling political elite to strike a compromise.

Lindsay Murdoch, Jakarta – The United States has entered the political debate in Indonesia, saying that the military must obey the civilian government, just days after army chiefs resisted moves by President Abdurrahman Wahid to impose martial law, dissolve parliament and call fresh elections.

Marianne Kearney, Jakarta – Jakarta has witnessed some very strange events in the last 48 hours – the army's strategic reserve chief Lieutenant-General Ryamizard Ryacudu sitting astride a tank told his troops that he would defend democracy to the hilt, amid threats that the first democratically elected president was about to declare martial law.

Indra Shalihin/HD Detik, Jakarta – Around 300 workers from the National Front for Indonesian Labour Struggle (FNPBI) staged a demonstration at the Indonesia Hotel roundabout. They urged the government to revoke the minister of labour decree No 78/2001 which is considered to harm the workers.

Robert Go, Jakarta – A change of leadership in Jakarta is crucial to Indonesia's economic recovery, say business leaders and analysts.

After 19 months in which the economy has spiralled downwards – from recovering to moving towards another potential crisis – many businessmen and ordinary Indonesians yearn for a more consistent government.

Jakarta – Indonesian authorities are preparing for the registration of some 100,000 East Timorese refugees in camps in West Timor, a report said Tuesday.

The government has set up 507 registration stations across East Nusa Tenggara province which includes West Timor, to find out how many of the refugees want to return home, and how many want to remain in Indonesia.

Devi Asmarani, Jakarta – Indonesian President Abdurrahman Wahid is seeking to patch up ties with his old Muslim allies, who have turned political foes, a palace source said yesterday. The move is a desperate attempt to save his presidency if he fails to secure a compromise with his estranged deputy Megawati Sukarnoputri.

Jakarta – Former Indonesian president Suharto was a better leader than Mr Abdurrahman Wahid, according to a readers' poll conducted by the Media Indonesia daily.

Rizal Maslan/HD, Jakarta – The meeting of the Army Forced generals at the Indonesian Military's headquarters last Saturday has indicated the evidence that the military have steadily inched their way back into position and are readying themselves for an attempt to take back their power.

Richard Galpin, Dili – East Timor is celebrating becoming the world's newest country. It has been under United Nations administration since 1999 when it overwhelmingly voted to break away from 24 years of Indonesian rule. Pro-Indonesian militias went on a bloody rampage following the vote, leaving parts of East Timor in ruins.

Jakarta – Members of the Anti-Communist Coalition (AAK) made visits to a number of major bookstores here on Saturday, but the alliance did not act on its earlier threat to raid them for leftist titles on Sunday.

Jakarta – A senior Indonesian military commander yesterday urged troops to remain loyal to the nation and not to any individual after generals warned President Abdurrahman Wahid not to dissolve parliament or declare a state of emergency.

Lindsay Murdoch, Jakarta – Indonesia's President Wahid is refusing to drop plans to sack senior generals, declare martial law and disband parliament in moves that have intensified the country's power struggle.

Jakarta – Security forces in Irian Jaya arrested 16 members of a Papuan separatist movement after an armed clash which injured five people, local police said yesterday.