Jakarta – Indonesia's lifting of emergency rule in the tsunami-hit Aceh province was a "cruel joke" that came even as the armed forces were stepping up military operations, separatist rebels claim.

Jakarta at midnight Wednesday refrained from extending a year-old state of civil emergency that had given authorities the power to impose curfews and other security measures in the province.

But the Free Aceh Movement (GAM) – which has fought since 1976 for independence in the resource-rich province in northern Sumatra – claimed that the Indonesian military had in fact "escalated their war".

"Jakartas declaration of the end of emergency rule for Aceh seems a cruel joke to most Acehnese here in Aceh," GAM military spokesman Sofyan Daud said in a statement.

"Despite the loudly trumpeted end of emergency rule, tens of thousands of troops continue to impose a terrifying peace on our people."

Emergency rule itself had replaced martial law, which was declared in May 2003 at the start of an all-out government offensive against separatist rebels following the collapse of peace talks.

The conflict dragged on as Indonesia shut the restive province to foreigners and the media, and human rights groups accused the military of serious abuses.

Then, after the December 26 earthquake and tsunami devastated Aeh's coastline and killed at least 128,000 people there, the military said it would switch its focus from combat to relief operations.

Representatives of the government and the exiled GAM leadership in Sweden reopened their dialogue in January, raising hopes for peace, even though the military has reported continued clashes since then.

Daud warned in the statement that the GAM remained "a well-organized military force" that is "capable of stronger steps than we have taken so far". The conflict has left 12,000 people dead since 1976.

In the latest clash on Wednesday, two rebels were killed and two soldiers seriously wounded, the Banda Aceh-based Serambi daily said. Rebels had ambushed four soldiers in an armoured military patrol vehicle in Pulo Naleung, Bireuen district, setting off a four-hour gun battle, the paper said, quoting local sources.

Neither military officials nor GAM sources could immediately be reached for comment.