Jane Perlez, Jakarta – Indonesia's highest legislative body, after rebuffing calls to impose Islamic law here in the world's largest Muslim country, closed its annual session today with constitutional changes aimed at enhancing the democratic nature of the state.

The rejection of a proposal to introduce Islamic Shariah law came even before it was put to a vote by the 700-member People's Consultative Assembly. The party of Vice President Hamzah Haz, the United Development Party, one of the main proponents of Shariah law, and two of its coalition partners withdrew the Shariah amendment when it became clear that it would lose.

Indonesia has a history, dating to the turbulent politics of independence in the mid-1940's, of resisting Shariah as the law of the land. In 1945, the architects of the Constitution specifically dropped a push for an Islamic state, and insisted that the new nation be secular.

There was little doubt that the effort by high-volume but relatively weak Islamic parties would fail again this time. The country's two main Muslim organizations, Nahdlatul Ulama and Muhammadiyah, both preach a tolerant form of Islam and oppose the establishment of a theocracy.

But in the context of heightened anxiety in Southeast Asia about the country becoming a center of Islamic militants, the latest rejection of Islamic law sent a reassuring signal.

After their defeat, the proponents of an Islamic state vowed to keep up their campaign. "This time, we're in front of a great wall that can't be penetrated but we won't surrender," said Najih Ahjad, a member of the Crescent Star Party. "We vow before God and the Muslim society that we'll keep on fighting."

The most fundamental changes decided at the assembly's two-week session were the abolition of parliamentary seats reserved for the military and provisions for the direct election of the president.

The absence of the armed forces from the Parliament would at least symbolize a reduced role for the institution that ran the authoritarian state from the mid-1960's until the fall of Gen. Suharto in 1998.

Under constitutional amendments approved by the consultative assembly, the military and the police would have until 2004 to give up the 38 seats they now hold.

There appeared to be little opposition from military leaders to the move. The military still retains huge influence in the country, and its senior members remain heavily involved in businesses, including logging, hotels and general trading. President Megawati Sukarnoputri pays more attention to and enjoys more support from the military than did her predecessor, the Muslim cleric Wahid Abdurrahman.

The session also approved constitutional amendments calling for direct presidential elections. Up to now, the president and vice president have been chosen by the consultative assembly, which consists of 500 legislators from the national Parliament and 200 nonelected representatives. The next presidential elections are to be held in 2004. Parliament must enact supporting legislation of the assembly's decisions on changing the Constitution.

Indonesia held its first free general election in four decades in 1999, a year after President Suharto was ousted from office. The consultative assembly chose Mr. Wahid as president even though Mrs. Megawati's party was a big winner in the election. The party fell short of an absolute majority, however.

In July 2001, the assembly removed the erratic Mr. Wahid from the presidency and elevated Mrs. Megawati, his vice president and the popular daughter of the nation's founding leader, Sukarno.