Driving inland from the west coast of Kalimantan, the Indonesian-controlled part of the island of Borneo, is like entering a war zone.

The road stretches ahead to the forested hills in the distance without a car in sight. The only visible movement is from the heavily-armed troops patrolling the road, or speeding past in trucks or on motorbikes. All the houses have been boarded up, the ethnic identities of their occupants scribbled hastily on the walls in an attempt to keep them out of Indonesia's latest outbreak of ethnic unrest.

A makeshift barrier of oil drums and wooden boards bars the way into the town of Anjungan. There are no obvious signs of any recent fighting, but a family sitting outside their house says there has been shooting nearby. They say they were too frightened to try to find out what happened.

In fact the Indonesian army seems to be embroiled in a full-scale ethnic war in Kalimantan which, by its own account, has claimed hundreds of lives over the past six weeks. Thousands of people have been displaced, some staying with relatives and others in refugee camps run by the army.

Journalists trying to enter the conflict area are being detained by the army and thrown out, but other sources have pieced together the story. Clashes between the Dayaks, the indigenous people of the area, and Muslim settlers from the island of Madura, broke out at the end of December. The situation had begun to calm down when a Catholic school attended by Dayak pupils in the provincial capital, Pontianak, was attacked and set on fire on January 28th, sparking off revenge attacks by Dayak youths on Madurese communities.

In one incident early last week a large group of Dayaks armed with spears and machetes approached the roadblock in Anjungan, which was manned by soldiers from an elite commando unit. When they tried to break through the roadblock, the troops opened fire. One soldier was hacked to death and between 15 and 20 Dayaks were killed.

There is a long history of conflict between the Dayaks and the Madurese. The Madurese first arrived in West Kalimantan in the 1930s, but their numbers increased sharply during the 1970s under the impact of the government's transmigration programme, which encourages people to leave crowded islands such as lava and Madura for the more remote areas of the republic. Kalimantan, with its low population density and rich natural resources, was a natural target of the programme.

Little consideration was given to the indigenous Dayaks, once famed as the headhunters of the Borneo rainforest. But as the rainforest was cut down, and replaced by palm oil and coconut plantations, the Dayaks found themselves at the bottom of a complex hierarchy of different ethnic groups, unable to continue their traditional patterns of agriculture and slow to adapt to new forms of employment. The mainly Christian, pig-raising Dayaks now share the lowest rung of the economic ladder with the fiercely Islamic Madurese, and often share the same neighbourhoods too. The authorities are discovering that their dream of mixing Indonesia's diverse peoples together can backfire.

In violent outbreaks that have shaken urban Indonesia over the past six months, soldiers have been seen standing by doing nothing. This policy of restraint appears to have ended in Kalimantan, with potentially disastrous consequences for the army's relations with the local population.