Jeremy Wagstaff, Manado – One day in December 1998, a hearse pulled into the graveled courtyard of the Saint Joseph Catholic church in this port city on the island of Sulawesi. Two men slid a white coffin out of the back of the car and hauled it up the steps to the church door.

Suspicious, several teachers who happened to be meeting at the church confronted the strangers, according to St. Joseph's priest, Yus Tatangi. One pried open the coffin to find a statue of the Virgin Mary lying inside. The horrified teachers called the police.

Outside Indonesia, such an incident might have been dismissed as a prank. But in a predominantly Muslim country in the midst of political and economic upheaval, it could well have sparked a riot. Indeed, St. Joseph's parishioners believe that was the intention: Within minutes of the coffin being discovered, a firebomb was thrown at a nearby mosque. In the market, rumors spread that the mosque had been burned down. "It could easily have gotten out of hand," says Mr. Tatangi.

Manado's neighbors haven't been so lucky. In the year and a half since the incident, most of northeastern Indonesia – an area the size of Thailand – has been sucked into ethnic, communal and religious conflict, leaving thousands of people dead and half a million homeless.

Shadowy players

Seemingly trivial incidents have often triggered the unrest: In the spice port of Ambon, a gang fight over a bus fare; in the remote village of Kao on Halmahera, a feud over a district boundary; in Poso, three days drive south of Manado, a drunken brawl. But behind the violence, many Indonesians believe, are power plays by shadowy national and local players stirring up grievances for their own political ends. Suspects range from loyalists of ex-President Suharto, forced out of office in May 1998, through generals resentful of President Abdurrahman Wahid's efforts to clip the military's wings, to local politicians eager to exploit the chaos to extend their reach.

Whatever its causes, the protracted violence is the worst Indonesia has seen since the 1960s. And while political leaders in the capital Jakarta, 2,000 kilometers to the southwest, have mostly viewed it as a sideshow, the unrest is beginning to affect relatively safe havens such as Manado.

Whether or not the trouble spreads, places like this predominantly Christian city are already showing signs of sectarian stress, increasing the probability that Indonesia's distant conflicts could creep closer to the country's political center.

Perched near the end of a narrow, 600-kilometer-long peninsula in the north of Sulawesi, Manado has become a sanctuary for tens of thousands of refugees – mostly Christians – fleeing religious strife in other eastern Indonesian islands. And after months of uncertainty, some are getting restless: In May, a soccer match between refugees and local sailors ended in a chair-throwing brawl. Local compassion for the refugees is wearing thin; the city now only extends one food delivery a day to their camps, compared to three a few months ago.

With parts of Sulawesi already charred by communal violence, trouble in Manado would jeopardize the whole of Indonesia's third-largest island. This week, Mr. Wahid attended a symbolic peace ceremony in Poso as part of efforts by regional governors to heal some of the communal wounds.

"If Manado goes, you can kiss goodbye to Indonesia," says John Kalangi, a Manado native and Christian activist. That's by no means inevitable. Many residents play down the possibility of unrest, pointing to a history of religious harmony in the city. Lucky Sondakh, university lecturer and adviser to his brother, the provincial governor, is more interested in doing business: Japan has just lifted a security restriction on its nationals visiting Manado, and the province plans to sign a tuna-catching agreement with the nearby Philippine port of Davao. "We believe we are more civilized," he says. "Maybe that's arrogant, but that's what we believe."

Eroding calm

But such faith has proved unfounded elsewhere. Ask the residents of Ternate, a volcanic island a short plane ride across the Molucca Sea, which had been largely untouched by violence since its days as the center of the world clove industry in the 17th century. When mainly Muslim refugees started arriving from nearby islands late last year, Ternate's calm gradually eroded, especially when copies of a typewritten circular, purporting to be a call to arms by local Christian leaders, appeared in the local market.

No one knows who circulated the letter. Among those suspected are local politicians or landowners seeking control of lucrative mines in neighboring Halmahera. Others point to a long-simmering rivalry between the sultanates of Ternate and nearby Tidore.

Whatever the case, tempers quickly flared into violence. In three days in early November, as many as 100 people died. On December 28, a crowd gathered outside the palace of the Ternate sultan, who was resented by some Muslims for his close ties to Christians. In a peace deal brokered by another sultan, businessman Gahral Syah, he was forced out and later left the island.

In the months since, Sultan Syah, a Muslim, has tried to reconcile the two sides. But with most of eastern Indonesia still traumatized by the killings or embroiled in continuing violence, he's fighting a losing battle. Homes, shops, offices and churches are occupied by Muslim refugees and daubed with anti-Christian graffiti.

While there has been little fighting in recent months on Ternate itself, that's because all the Christians, including nine members of the district parliament, have fled to Manado. "During our history we've been attacked by Spaniards, Portuguese, the Dutch and the British. But there was no tragedy like this," says local Muslim parliamentarian Syaiful Bahri Ruray. "This conflict has destroyed the harmony of the past."

Confronting the hatred

On a recent visit to a Manado hospital, Sultan Syah is confronted by the results of the religious hatred. Christian refugees from a bout of fighting in June on the island of Halmahera, parade their injuries. One woman's jaw is disfigured; a Muslim had jammed an automatic rifle in her mouth and pulled the trigger. A teenage boy is dotted with bandages from machete blows; most of one hand is gone. Curly-haired Yeskel Bahang is in tears, explaining how Muslims killed his nephew in front of him after years of peaceful coexistence. "I couldn't do anything," he says. "I understand," the sultan says softly.

Such deep sectarian divisions have yet to emerge openly in Manado. But there are signs that animosity between Christians and Muslims lurks near the surface. The same day as the sultan's visit, the calm of the hospital is shattered when a truckload of Muslim youths arrive, bursting into the intensive-care unit to check rumors that one of their friends was knifed by a Christian. Nurses and other patients look on nervously as the angry young men mill around the lobby until police arrive. The commanding officer approaches the gang leader, reassuring him that the culprit will be arrested. He lays a calming hand on the man's shoulder, and the 40-strong gang gradually disperses.

With Manado's refugee population growing by the day, it's getting harder to keep things calm. "Our fear is that the refugees are going to start something," says Dr. W. Walla, a Protestant leader who visits the camps twice a week to monitor the refugees. "Who knows whether among them will be a provocateur?" It's this nightmare that some Manado Christians are trying to pre-empt.

Some want to absorb the refugees into local life as quickly as possible. For example, a band of young doctors from the hospital has bought land to set up refugees as farmers. And businessman Michael Adiloekito has opened his experimental mushroom farm to refugees.

Others are taking defensive action. Mr. Kalangi, the Christian activist, is trying to prepare fellow Minahasans (as Manado Christians are known) for a possible invasion by Muslim warriors. A former oil worker in his 30s, he claims to have 200 recruits in each subdistrict in the city. On route to a meeting where he hopes to elicit support from veterans of the region's revolt against Jakarta in the late 1950s, he gestures at the hills above Manado. "This was where the rebels held out for years," he says. "We could do the same, if necessary."

Limited impact

But Mr. Kalangi's message has only limited impact on the meeting itself. Around a wooden living room in the lakeside town of Tondano, 20 or so elderly Minahasans sip tea and listen bemusedly. One former civil servant objects mildly to the recruitment drive. "This is no time to worry about being primordial. Don't be ashamed," retorts Mr. Kalangi.

Mr. Kalangi's fears may be alarmist. There are no signs of any imminent invasion by Muslim outsiders. But Manado and its environs reflect the same combination of factors that made conflict in surrounding islands possible.

With the fall of authoritarian President Suharto, local politics has taken on a life of its own: Elections and greater autonomy have thrown up new leaders, not all of them sensitive to balancing the local ethnic and religious mix.

In Manado's province of North Sulawesi, the change has upset the religious balance in favor of the Christians, who for the first time in years, occupy the key posts of governor and deputy governor. This has prompted some Muslim politicians from the province's other main town, Gorontalo, to demand their own province. Coming months will determine whether such political divisions are stoked into open hostility in Manado. But those who have survived the past year's violence aren't optimistic. Gretje Watimure, 43, sits in a spartan room in Manado talking fondly of her home in a leafy lane behind Ternate's main hospital, now boarded up and occupied by Muslim refugees. She knows she may never see it again. Does she feel safe now? "We've heard that once they clear all the Christians out of there, they'll come here," she says.

Rin Hindryati contributed to this article.]