Lindsay Murdoch, Jakarta – Christian and Muslim leaders yesterday hailed a Government-brokered agreement as the best chance yet to end a three-year war in the Maluku islands that has killed more than 5000 people and forced about 700,000 from their homes.

But the International Crisis Group, headed by the former Australian foreign minister Gareth Evans, has urged Indonesia to use elite forces from outside the islands to keep peace.

The group, in a report on the conflict, also recommends that Indonesian forces ensure the safety of Muslims in the islands, especially Ambon, before disarming Laskar Jihad, the main Java-based Muslim militant group involved in fighting.

Thirty-five representatives from each side agreed late on Tuesday to end all violence, respect the rule of law, ban all armed militants and establish a national investigation team to examine the causes of the conflict. Rival leaders agreed during the talks on joint patrols to enforce the peace. Special commissions would also be set up to rebuild the region and the lives of its 2.1million people.

Diplomats said an end to the fighting would open the way for tens of millions of dollars of foreign aid to be pledged to the region.

Although the agreement, signed after two days of talks in the South Sulawesi town of Malino, rejects the presence of all militias, including Laskar Jihad, the group said yesterday its fighters would not leave the islands until law and order had been restored and separatist members of a group called the Republic of South Maluku had been arrested.

Laskar Jihad's spokesman, Ayib Syafruddin, said in Jakarta that the group's work in the Malukus centred on "humanitarian work" rather than war. "Every citizen of this country has the right to stay anywhere he wants," Mr Syafruddin said. But Laskar Jihad members wanted to go home: "We have families too, you see."

Ambon's Bishop, Monsignor Mandagi, said after the signing of the agreement he was hopeful it would lead to peace. "There is no alternative," he said.

The head of the Muslim delegation, Thamrin Ely, said: "We are all speaking with one voice here. We all want peace and we want to put this violence behind us."

In its 30-page report the International Crisis Group urges the sending of elite forces from outside Maluku because "the reality is that local forces, both military and especially the police, are highly vulnerable to contamination - partisan alignment with their own religious community".

The report says Muslims lack confidence in the security forces' ability to maintain order and fear that Laskar Jihad's withdrawal would leave them vulnerable to revenge attacks. But it says Christian leaders see Laskar Jihad's presence as the key obstacle to a more permanent peace.