Indonesia said it will end martial law which has been in force in Aceh province for the past year while troops battled separatist guerrillas.

The province will in future be under a state of civil emergency, acting security minister Hari Sabarno said after a cabinet meeting on Thursday.

He said the military operation, which has claimed more than 2,000 lives in the past year, would continue and rebels remain a potential threat.

Indonesia imposed martial law on May 19, 2003, and launched a huge military offensive to crush the Free Aceh Movement (GAM), which has been fighting for independence since 1976.

Some 40,000 troops and police, backed by aircraft, warships and light tanks, were initially deployed. But the minister estimated that only 60 percent of their fighters had been killed, captured or surrendered. "We just managed to paralyse around 60 percent of their personnel and about 40 percent of their armaments," he told reporters.

However he said that out of 6,000 villages in Aceh, only 11 are still not under official control. He said Acehnese were now braver in tipping off authorities about rebel activity and in organising the defence of their villages.

Sabarno said a presidential decree will be issued to end martial law before its first anniversary.

He said both the military and the police will remain in the province on Sumatra island. But the police might take the lead in handling some security problems, depending on the situation.

The military controlled most aspects of life in the province through martial law. Under a civil emergency the civilian authorities are in charge but still have power to order press censorship and restrict public gatherings.

The minister said Acehnese people "want the TNI [armed forces] and the national police to be maintained there." He said the Malacca Strait between the province and Malaysia would be closely guarded to cut logistics and weapons for the guerrillas from overseas.

Sabarno said an "integrated operation" would continue, focusing not just on security but on the economy, humanitarian matters, restoring government and repairing infrastructure.

A military statement this month said almost 2,000 rebels and 130 soldiers had been killed in the past year. Another 2,100 rebels had been arrested and 1,276 surrendered.

It said GAM's estimated strength was 5,251 before the offensive began, about 100 fewer than the number said to have been neutralised. Military spokesman Yani Basuki said the rebels had been recruiting since they came under attack.

Human rights groups say many of the victims have been civilians, a charge the army denies. "There has been a dramatic escalation in human rights violations by the security forces under the military emergency," Amnesty International said in a statement Tuesday.

Human rights activist Munir said the announcement "is just a formality" and does not clarify what the situation on the ground will be. He said it is not clear, for example, "if repression will be reduced or not ... will the number of troops be reduced?"