Helsinki – The Indonesian government and Acehnese rebels have reached a groundbreaking agreement to end 30 years of fighting in Aceh province and a memorandum of understanding will be formally signed next month.

"There will be peace," Indonesian Justice and Human Rights Minister Hamid Awaluddin told reporters at the end of a fifth round of negotiations between the government and the Free Aceh Movement (GAM).

The agreement is to bring a "peaceful, comprehensive and sustainable solution" to end a conflict that has raged in the province since 1976 and cost nearly 15,000 lives.

Australia has welcomed the agreement between the Indonesian government and separatist rebels to end 30 years of fighting in Aceh province. "It's something we've wanted for a long period of time. There's been so much agony in Aceh," said Defence Minister Robert Hill. "The fact that the Indonesian government and GAM seem to have been able to reach agreement, I think, is very exciting for the people of Aceh and Indonesia as a whole." Both sides agreed that "no substantive changes" will be introduced to the eight-page long initialed memorandum before it is signed on August 15 in Finland.

"We may add a comma or correct a spelling mistake," peace talks mediator Martti Ahtisaari told reporters, refusing however to reveal any of the details of the accord.

He merely said that the agreement covered the governing of Aceh, including political participation, as well as the questions of human rights, amnesty and reintegration into society, security arrangements, and dispute settlement.

He also called for an immediate end to ongoing bloodshed in the province. "Of course all hostilities have to end with the signing of the memorandum of understanding on the 15th of August," he said.

Both sides also agreed to establish an Aceh monitoring mission to check on progress which they hope will be run by the European Union and a number of Asian countries. Ahtisaari said the EU had not formally replied to the invitation, but would dispatch experts to Indonesia by the end of this month to prepare a decision.

The ongoing round of talks, which began on Tuesday and which is the fifth held in the Finnish capital this year, had been considered a last chance to bring an end to the bloodshed soon. The talks resembled a rollercoaster-ride of alternately good and disastrous progress reports throughout the week and success was only ensured when the thorny issue of local political participation in Aceh had been resolved on Saturday.

GAM had demanded the right to create local political parties that are not controlled centrally from the capital, something that today is illegal in Indonesia.

GAM spokesman Bakhtiar Abdullah confirmed before the talks finished that Jakarta had said it would permit the creation of local political parties in the province for a trial period of one year, but Ahtisaari on Sunday declined to confirm whether this was indeed the plan. "The idea was that... there should be a chance for anybody to be able to participate in the political process," he said.

GAM gave up its demand for full independence and said it would disarm, while the government has announced it will withdraw its troops from the province once the rebels hand in their weapons. GAM indicated that it was not entirely comfortable with any role hardliners in the Indonesian military may play, but said it was willing to take the risk. "This agreement is a leap of faith for GAM (...) but this leap of faith is not without risks, and we now require the Indonesian government to exercise full authority over the Indonesian military (TNI) in order to allow this process to succeed," GAM said in a statement. "We feel that the peace process (...) will be successful," added rebel spokesman Bakhtiar Abdullah.

Nur Djuli, a negotiator on the GAM side, said he saw no problem with the GAM leadership, which is for the most part exiled in Sweden, returning home.

"There will be no distinction any more between GAM and non-GAM people, so if they want to return they will return," he said.

Participants agreed that a peace deal had seemed unthinkable after Jakarta declared martial law and launched a major military offensive in Aceh two years ago.

But renewed efforts to make peace were prompted by a need for international aid to reach Aceh, which bore the brunt of last December's tsunami. More than 131,000 people in the province perished.