Indonesia revoked a three-year state of emergency in the eastern Maluku islands, where clashes between Muslims and Christians have left more than 5,000 people dead.
Home Affairs Minister Hari Sabarno announced the end of the emergency during the inauguration of the new governor of Maluku province, Karel Albert Ralahalu, in the city of Ambon.
Sabarno said troops sent into the archipelago following the sectarian violence would be withdrawn gradually. "They still have a lot of work to do in other places," Sabarno said.
The minister said he hoped the improving security in the region would lure businesspeople to invest in the Malukus. "The situation is conducive to investment now," he said.
Jakarta imposed the emergency on Maluku and North Maluku provinces in June 2000 after Muslim-Christian violence erupted in Ambon and spread to other islands. The emergency in North Maluku was lifted in May.
Under the civilian emergency, the governor held the supreme command over the military and the police, and had the power to stop people from entering the province or any particular area, to ban public meetings and to censor press reports.
More than 5,000 people were killed and tens of thousands made homeless in the violence that was sparked by a trivial street dispute between a Muslim and a Christian in Ambon on January 19, 1999.
The dispute degenerated into a prolonged, bloody conflict, opposing members of the two communities. The violence quickly spread to the neighbouring islands in Maluku and Maluku Utara provinces. The government brokered a peace pact in February 2002 but sporadic violence has continued.
During the unrest, members of the two religious communities set up roadblocks between different sections of the city and killed any opponents they encountered in their areas. People had to travel across the Bay of Ambon in speedboats to bypass the roadblocks.
More than 80 percent of Indonesia's 212 million people are Muslims, but in some eastern regions, including the Malukus, Christians make up about half the population.