Indonesian soldiers entered the Parliament building Friday and ordered student protesters who have occupied the building for several days to leave.

After dark, dozens of military trucks arrived loaded with soldiers, who leapt out and started beating the students with sticks. The students had taken over Parliament to press their demands for political reform.

"Disperse, disperse," shouted military police carrying M-16 rifles, truncheons and tear gas canisters. Some students, many holding sticks, formed a barrier as the security forces approached.

The students had decided to stay at Parliament even though their main demand was realized Thursday, when President Suharto resigned, saying they did not trust his successor, B.J. Habibie.

Mr. Habibie, Mr. Suharto's hand-picked successor, faces an intimidating array of problems, from the selection of a cabinet to his handling of demands for retribution against Mr. Suharto, or financial restitution from Mr. Suharto's wealthy family members. Mr. Habibie moved cautiously in his first day on the job, appointing a cabinet consisting largely of the same officials who ran Mr. Suharto's government. He called it a "Reform and Development Cabinet," but one prominent political activist, Loekman Sutrisno, called it "change without change."

Pro-reform activists rejected the Habibie presidency within hours of his swearing-in Thursday morning. Protesters at parliament hoisted a banner: "Refuse B.J. Habibie as President." One speaker told a crowd of 8,000 people who had gathered amid the garbage left over from this week's occupation of parliament by protesters: "We have to get rid of Suharto's cronies, not just Suharto."

In his first speech as president, the 61-year-old Mr. Habibie tried taking a conciliatory line. Surrounded by the symbols of the presidency – the red-and-white national flag and a golden Garuda, a mythic Javanese bird, on the wall above a large desk – Mr. Habibie pledged on national television to make reform his top priority. He said his government will attack "corruption, collusion and nepotism," stark allusions to the widespread criticisms of Mr. Suharto and his cronies that surfaced in an escalating series of protests leading up to Thursday's historic transition.

Friday morning, he hewed to the same rhetoric when he announced a new cabinet that includes many senior technocrats, including economic officials who worked with Mr. Suharto. In a concession to student protesters in Jakarta, Mr. Habibie appointed Syarwan Hamid, a former general and parliamentarian who is popular, as interior minister. Mr. Habibie also replaced several key ministers close to Mr. Suharto, including Bob Hasan, a tycoon who had been put in charge of industry and trade earlier this year, and Siti Hardijanti Rukmana, Mr. Suharto's eldest daughter, who had been social minister.

Habibie's ties are questioned

But activists and many other Indonesians contend Mr. Habibie is tainted by his long, strong links to Mr. Suharto. That past, they say, may make it impossible for Mr. Habibie to significantly change Mr. Suharto's system or act against his 76-year-old predecessor and lifelong mentor.

Amien Rais, the outspoken leader of Indonesia's second-largest Muslim group, said Mr. Habibie should think of his regime as "transitional, provisional" and shouldn't expect to fill out the nearly five years left in the term Mr. Suharto began only this year. Mr. Rais and others want to see an early parliamentary election, followed by the selection of a new president.

In Washington, the US State Department urged the new Indonesian government to follow democratic principles during its transition and work with "all elements of Indonesian society." State Department spokesman Jamie Rubin said the US wasn't urging quick elections, though that was the undercurrent of his remarks. "I'm sure there will be elections at some point," he said, "The question is when."

At Thursday morning's swiftly arranged swearing in, the arrangements designed to protect Mr. Suharto were made plain. In televised remarks, armed forces commander Gen. Wiranto, whom many analysts believe isn't happy about Mr. Habibie's ascension, said the military "will guard the safety and the honor" of all former presidents, "including Mr. Suharto and his family."

Probe of Suharto urged

Calls for an investigation of the former president and his family's vast corporate holdings and wealth began immediately. "If the pressures are so strong, something might happen," said Parni Hadi, who heads Republika, an influential Muslim newspaper in Jakarta.

One of the hazards the Habibie presidency faces is the widespread feeling Mr. Habibie can't foster or deliver the change that Indonesia needs. "It was a constitutional handover. But what we have here is the same Indonesia as before," says Tim Condon, regional economist of Morgan Stanley Dean Witter in Hong Kong.

Foreign analysts are focusing on Indonesia's economic woes, which worsen daily. Many Jakartans fear that food could soon run critically short. The banking system has been crippled by bad loans and deep depreciation of the currency, the rupiah. Unemployment is surging.

Less than 12 hours before Mr. Suharto stepped aside, the International Monetary Fund said it will need to delay considering the next planned $1 billion tranche from its $43 billion, twice-revised rescue package. This is due to last week's Jakarta riots and Indonesia's volatile politics, which sent IMF staff in Jakarta scurrying overseas, along with tens of thousands of other foreigners and well-off Indonesians.

Financial assessment

World Bank President James Wolfensohn told reporters it would take at least 48 hours to assess the country's financial system once the new government settles into place. The bank's country director, Dennis de Tray, said Indonesia's political paralysis has "thrown back three months" the country's economic progress, "unless something miraculous happens to the rupiah." The currency was trading at around 11,000 per dollar Thursday, little changed from the day before.

Mr. Habibie, in his televised remarks, said his government would work with the IMF. And political activists, notably Mr. Rais, said they recognized the necessity of working with the IMF. "We must swallow the bitter pill in order to be healthy in the future," he said.

The first sign of what he promised would be new effectiveness was his cabinet selection, which showed continuity though perhaps not inspiration. Respected Foreign Minister Ali Alatas will stay, as will all four "coordinating" ministers from the cabinet Mr. Suharto named in March, including senior economics minister Ginandjar Kartasasmita. But Mr. Habibie's advisors felt they had broadened the cabinet beyond figures from the ruling Golkar party and the military. Among those: the new finance minister, an experienced ministry official, Bambang Subianto.

Scrutiny of cabinet

The cabinet choices will be heavily scrutinized. Harsono, an activist and writer in Yogyakarta, site of huge anti-Suharto protests, said, "If the cabinet is good, then the people wait a while. Maybe a few weeks. If they don't like the cabinet, it will be bad."

Early indications are it's not going to be well received. "It's below my expectations," said Mr. Sutrisno. He noted that the cabinet includes no representative of Indonesia's Chinese minority, the target of rioting mobs in recent weeks.

Even if the cabinet subsequently gets good public reviews, Mr. Habibie faces a daunting task winning support from the critical Indonesian organization, the military, the springboard for Mr. Suharto and most of his previous vice presidents. "I doubt Habibie can get broad-based support from the army," one military analyst said. "Many officers don't like him, and they wouldn't mind at all if a civilian president stumbles, since this will help the army keep a big role in politics."

Political figures noted that Gen. Wiranto, the country's most powerful army figure, had appeared to oppose Mr. Habibie's ascension to the presidency as recently as Monday, when Gen. Wiranto blocked talk of a constitutional transition like the one that just took place. "I thought Habibie was finished" because of the army's move, said Adi Sasono, executive director of a group of Islamic intellectuals aligned with Mr. Habibie. "I think Suharto's influence was very crucial. He must have requested the army to support" Mr. Habibie. Mr. Suharto's endorsement doesn't necessarily bode well for Mr. Habibie.

Another matter any successor government to Mr. Suharto's is likely to feel pressure to examine is the Suharto family's reputed fortune. "The money must be returned to the people," says Yopie Azbandi, a 23-year-old student in a sweat-soaked headband emblazoned, "Reformasi" – reform. "He must go to court."

The former president's wealth – his six children and other relatives are widely thought to be worth billions of dollars, much of it accumulated through the operation of monopolies and other government-licensed businesses during Mr. Suharto's rule – was one of the capital's chief topics of concern Thursday. A person close to the family said the six Suharto children plan to remain in Indonesia, though some may now be overseas. Looking stunned, Mr. Suharto left the palace for the last time as leader, helped into a waiting black Mercedes-Benz limousine by his eldest daughter.