Indonesia's military campaign to crush separatist rebels in Aceh province, now in its fifth month, has created a humanitarian crisis, a human rights group said in a report.

The Commission for Involuntary Disappearances and Victims of Violence in Aceh (Kontras-Aceh) said Thursday restrictions imposed by the military on Acehnese have caused a collapse in the people's economy.

"There are not any significant results that have been achieved since the martial law began, except a humanitarian crisis," Kontras-Aceh's campaign coordinator Teuku Samsul Bahri said in the report.

The government put Aceh under martial law on May 19 and launched a military operation involving 40,000 troops and police to wipe out the Free Aceh Movement (GAM), after peace talks collapsed.

Residents in Lokop in the mountains of East Aceh district have suffered greatly from malnutrition because the military has restricted the entry of essential food to the region, the report said.

"After three months of military emergency, the condition of the people of Lokop is a cause for great concern." The military allows shopkeepers and traders to carry only three sacks of rice and one sack of sugar per day, Bahri said, and families may only buy one litre of rice and 500 grams of sugar daily. Those who break the rules would be accused of being GAM rebels, the report said.

The prices of basic needs such as kerosene for cooking and sugar have skyrocketed and it is very hard for people to work their fields or rice-paddies, the report said. "Crops such as rice, cocoa and coffee are left to rot because of the difficulty of transporting them anywhere," Kontras-Aceh said.

The group also said that the military had forced farmers to sell their rice to middlemen whom it appointed to prevent the commodities from being sold to rebels. Fishermen have been allowed to fish for only three hours, making it hard for them to go home with a good catch, it said.

Residents at Kuala Simpang Ulim in East Aceh, who are mostly farmers, have been allowed by the military to work their land for only three hours a day, the report said. Soldiers would beat any residents who broke the rule, the report said.

The group said human rights workers have also been threatened with arrest. "Monitoring activities have come to a halt because human rights defenders, including the many activists and volunteers spread across Aceh who are working for Kontras, have gone into hiding," it said.

Military spokesman Ahmad Yani Basuki described the report as "all lies." "Do you think the TNI [armed forces] want to kill the people of Aceh? We are here to save the people from GAM's stranglehold," he told AFP. "We've heard all of this NGO nonsense. They never appreciate what we're doing in Aceh."

The military says more than 900 GAM rebels have been killed since the operation began and 66 members of the security forces have died. More than 1,800 rebels have been arrested or surrendered, it says. The military has also said that some 304 civilians have died but did not say who was responsible for the deaths.