Jakarta – Indonesian officials and rebel leaders from Aceh province will resume peace talks in Geneva next month in yet another bid to resolve a bloody separatist conflict that has raged for decades, local media reported on Saturday.

The two sides last met in Geneva four months ago when they agreed to extend indefinitely a ceasefire which has virtually been ignored. The ceasefire was first agreed to in June last year.

"The peace dialogue will be attended by [chief security] Minister Agum Gumelar," the leading Jakarta Post quoted Defence Minister Mahfud M.D as saying. The report said the peace talks were set for July 2 and 3.

The planned talks come amid renewed violence in the staunchly Muslim province on the northern tip of Sumatra island where 60 people were killed in the past week. In the latest clash, police said rebel gunmen opened fire at a wedding killing a policeman on Thursday and in another incident a family of three was slaughtered in their home. These incidents also come at a time when the government says it has improved the security situation in the province.

Thousands have been killed in clashes between the Free Aceh Movement (GAM) rebels and security forces in recent years in fighting that has forced many villagers to flee their homes.

Mahfud told reporters on Friday security measures introduced in April to quell the GAM rebels had reached a "clear point". "It seems that GAM has weakened and all of the government facilities [in Aceh] which had been disabled have restored operations," Mahfud said.

On Thursday, a report by an independent think-thank criticised the government's new policy in Aceh and said it must cut back military operations there in order to find a peaceful solution to the growing separatist tensions.

The report by the International Crisis Group said President Abdurrahman Wahid's April plan to put down the rebels relied too heavily on the use of force and risked emboldening the separatists in their cause.

The conflict has also taken its toll on the country's battered economy. Exxon Mobil closed three gas fields in the province in March following dozens of security incidents over the past two years. Exxon Mobil Indonesia – a unit of the world's top energy company Exxon Mobil Corp – is the country's second largest producer of liquefied natural gas and a vital cog in the Indonesia's oil and gas-reliant economy.

Resentment against Jakarta runs deep in Aceh after two decades of often savage military operations and what locals see as the plundering of their wealth.