Dan Eaton, Jakarta – Indonesia must show separatist rebels in tsunami-hit Aceh province that the central government is ready to compromise if it ever hopes to achieve a peace deal, a rebel adviser said on Thursday.

Damien Kingsbury, an Australian academic advising the Free Aceh Movement (GAM), made the comments ahead of a fourth round of peace talks due to be held between May 26-31 in Helsinki.

Responding to a Reuters interview on Wednesday with senior government negotiator Sofyan Djalil, who rejected a key rebel demand that they be able to take part in elections as a local political party, Kingsbury also accused Jakarta of failing to curb abuses by the Indonesian military.

"The fundamental right to assembly implies the right to form political parties, and this will be absolutely necessary if the people of Aceh are to ever be given their own voice on their own affairs," Kingsbury said in written remarks to Reuters.

He said GAM had shown goodwill by dropping demands for independence. "However, so far the Indonesian government has not reciprocated this goodwill in any practical sense."

The two sides revived talks after a giant earthquake and tsunami smashed Aceh on Dec. 26, killing up to 160,000 people and sparking a massive international relief effort.

Djalil, who is also Indonesia's information minister, said the next round of talks could be vital, with sensitive political and security issues being discussed.

He said if progress was made, only one more round would be needed and a peace deal to end one of Asia's longest running separatist wars could be signed by August.

But he said GAM would not be allowed to contest elections as a local party under any pact to end the fighting that has killed 12,000 people since 1976.

Empty sabre rattling?

At the last round in April, GAM presented proposed changes to electoral laws that currently say political parties must have formal branch representation in more than half of Indonesia's 33 provinces and their headquarters in Jakarta.

Djalil insisted there was enough goodwill on both sides to reach a final peace agreement and said Jakarta was willing to accept a small number of unarmed foreign troops as monitors under any peace agreement.

However, Kingsbury said any monitoring troops would need to be armed. "By definition this will require a large number of experienced civilian administrators, external civilian police, and external military monitors," he said. "Both external police and external military monitors will have to be armed."

Indonesia on Wednesday lifted emergency laws on Aceh that were imposed last year to deal with the rebellion, something Djalil said showed Jakarta's commitment to making peace.

But he said troops would only be withdrawn once a peace deal was reached, and even after that a military presence would be required. GAM wants all government troops out.

Kingsbury said lifting the emergency status without scaling back Indonesia's troop deployment sent the wrong message.

"The ending of the 'state of emergency' without a reduction of troop numbers in Aceh is further proof that nothing has changed and that promises made about 'normalisation' are empty," said Kingsbury.

"I think we all hope that Sofyan Djalil's comments were just empty sabre rattling aimed at destabilising debate before the next round of talks begins."