Andrew Burrell, Jakarta – A landmark peace deal between the Indonesian government and Aceh separatists still faces big hurdles after Jakarta legislators vowed yesterday to block moves to allow the rebels to form local political parties.

The preliminary agreement, reached in Helsinki on Sunday, was hailed yesterday as the most positive development yet in attempts to end one of the world's longest-running wars.

The two sides agreed to sign a formal treaty on August 15 to end a conflict that has killed thousands of people over the past three decades and deterred foreign investment in the resource-rich province.

A lasting peace deal would also smooth the way for the $5 billion international reconstruction effort in Aceh, which was devastated by an earthquake and tsunami in December.

But analysts said they doubted whether the agreement would translate into an on-the-ground ceasefire involving the Free Aceh Movement (GAM) and the Indonesian military (TNI).

"It's a long way from signing a piece of paper to actual enforcement on the ground," said Sidney Jones, the International Crisis Group's project director for South-East Asia.

An Indonesia specialist from the Australian National University, Edward Aspinall, said the Helsinki accord was far stronger than a previous peace deal signed in 2002, which fell apart just months later. "But there are still a lot of potential complications along the way over every item you can imagine," he said.

The most obvious sticking point in the treaty, which remains confidential, is an apparent concession by government negotiators to allow GAM to form an Aceh-based political party. Under Indonesian law, all political parties must have representation in at least half of the country's 32 provinces and have headquarters in Jakarta.

This has been aimed at preventing any form of self-rule in provinces such as Aceh and Papua, which have strong separatist movements.

Several nationalist legislators in Jakarta said yesterday they would not agree to changing the law to allow Aceh-based political parties to contest local elections. "Such a demand is not allowed and it definitely violates the constitution," Effendi Simbolon, a prominent parliamentarian, told The Australian Financial Review. "So why we should consider the demand? It is useless to discuss it."

In comments before the deal was announced, Indonesian President Susilo Bambang Yudhoyono also appeared to have rejected the idea. "I have repeatedly explained that the Indonesian political party system is a national system," he said.

However, his vice-president, Jusuf Kalla, said he supported the move. The peace deal contains provision for GAM's disarmament and the withdrawal of 50,000 TNI troops.