Vaudine England and Agencies, Jakarta – Soldiers and riot police lounged in makeshift camps under flyovers and in central parks across Jakarta as their leaders held festivities to mark Army Day at the palm tree-lined grounds of Cilangkap military headquarters.

The ceremonies ended with an exchange of singing skills, in which President Bacharuddin Habibie sang Strangers in the Night, followed by a heart-rending version of When I Fall in Love by armed forces chief General Wiranto.

Meanwhile, an Indonesian student was stabbed to death during a student protest in Palembang, south Sumatra, as thousands of students in Jakarta and cities in Java and Sumatra marked the day with mass protests demanding the military return to barracks, witnesses and reports said.

In Jakarta, at least 400 students of the City Forum marched down a main avenue towards parliament – where the National Assembly was convening – to demand the military get out of politics. The protesters were stopped by a strong cordon of police and soldiers at an underpass 200 metres from the gate to parliament.

The President told the military to avoid security excesses, as international pressure mounts over the role it played in the East Timor bloodbath.

"An excessive security approach is no longer relevant. However, that does not mean stability and security is not important and should be ignored," Mr Habibie told the country's military as it celebrated its 54th anniversary.

Mr Habibie said the military could prove itself "through its reforms in a bid to become a defence and security force that is professional, effective, efficient and modern".

He emphasised the military's newfound ability to be neutral, as shown in the June general elections, saying this "has shown the armed forces' commitment to develop democracy, reforms and human rights".

Mr Habibie's own vulnerability in the country's forthcoming presidential poll requires him to keep the armed forces on his side, but public antipathy towards the military has rarely been higher.

Even the general who promoted the right of the military to engage in politics, retired General Nasution, now questions the military's right to its 38 seats in parliament.

The military's game is not yet over but "it can change every day now", said military analyst Arbi Sanit. "They are still important in local politics, but as Reformasi [Reform] continues, they have less and less power," he said.