Agencies in Jakarta and Ambon – Muslim students yesterday threatened a holy war against Christians unless the Government stems sectarian clashes in the eastern Maluku islands that have left more than 700 dead in two weeks.

As violence raged in four areas on Halmahera island, the head of the Indonesian armed forces (TNI), Admiral Widodo Adi Sudjipto pledged the military would "settle the problem".

Renewed clashes were reported in Seram island, where at least 23 people have been killed since Friday.

North Maluku province police chief Lieutenant-Colonel Didik Prijantono said at least 502 people had been killed on Halmahera since December 26. He denied a report the death toll was 2,000.

Adjit Tahir, of the Muslim Al Fatah emergency post in the capital Ambon, said at least 1,400 Muslims had been "massacred" in Tobelo, a sub-district of Halmahera.

Thousands more fled the violence yesterday, seeking shelter in Ambon and elsewhere.

More than 10,000 people have left their homes and taken shelter in mosques, churches, schools and military barracks.

Reports of attacks on Muslims in Halmahera prompted about 1,500 Muslim students to protest outside the office of Vice-President Megawati Sukarnoputri – charged by President Abdurrahman Wahid with restoring peace in several regions, including Maluku. Many called on her to resign. Some repeatedly shouted, "Burn churches".

"If peace is hindered, Jihad [holy war] becomes the choice," read one banner. Another warned: "Muslim genocide in Ambon can also mean Christian genocide in Jakarta."

The military has assumed responsibility for security in the islands, where a year of sectarian conflict has left more than 1,200 dead.