Vaudine England, Jakarta – Troops with shoot-on-sight orders were yesterday patrolling a remote valley in Irian Jaya, where 40 people are believed to have died in violence triggered by the killing of two indigenous people by police at a separatist flag-raising ceremony.

Senior police officers claimed yesterday that peace had been restored to the Baliem Valley, but thousands of non-Papuan migrants were trying to flee the town of Wamena, most doctors there had fled, and other residents were sheltering in churches and mosques.

Authorities in Jayapura, the capital of Irian Jaya, Indonesia's easternmost province, sent a Hercules transport plane to Wamena airfield, but the plane will only be able to ferry out about 80 people.

Mobs of indigenous Papuans are reported to have raped, lynched and beheaded migrants, but human rights groups say many victims were shot by police and buried in mass graves.

"It's safe and quiet now. There are many troops on the streets," said provincial police chief Brigadier-General Silvanus Wenas. National police spokesman Saleh Saaf said: "The situation in Wamena is slowly getting back to normal. We have pushed the attackers to the mountains. They burned some of the victims alive and raped women."

Contact with Wamena, the capital of the highland Baliem Valley, is difficult, but rights and church groups dispute the official claims, saying the fighting was provoked by police.

Conflict flared when police tried to pull down the last pro-independence flag in Wamena on Friday, despite official policy that one flag is allowed to fly in each district at least until October 16, sources said.

"The whole attack by Brimob [Mobile Brigade riot troops] was unprovoked, so of course the people in Wamena were angry," a source in Jayapura said. "The fighting went on into Saturday night." Most victims were of non-Papuan background, mainly traders from Sulawesi or Java who have migrated to Irian Jaya in recent years.

"I wept in front of the police, telling them not to pass on the order from Jakarta [to remove the flag], but they wouldn't listen," said Herman Awom, a spokesman for pro-independence umbrella group the Papua Presidium.

He said migrants became a target of Papuan rage as police tried to hide among them. "We don't hate the migrants. The Papuans in Wamena don't hate them. But the police ran for cover to the houses of migrants," he said. Separatist leader Theys Eluay said he would meet President Abdurrahman Wahid today.

A foreigner who lived in the Baliem for a dozen years said: "Baliem people's weapons are spears or lances and bows and arrows. It's certainly not normal to behead or rape their victims – which doesn't mean it can't be happening now." This source and others concur in seeing the outbreak of mob killing as predictable and provoked.

Economic competition alongside growing independence fervour have been fomented in a province where the indigenous Papuans have been excluded from development and marginalised by increasing numbers of non-Papuans. At the same time, troop levels have increased.

One local source said: "There has been a lot of build-up to this outbreak in Wamena, and it suits some groups like the military to create a conflict which they then blame on so-called separatists. This is provoked, it is surely provoked."