Tiro – Eyes red with tears, Alamsyah Mahmud recalls how in 2001, Indonesian paramilitaries swooped on his village in Tiro, the birthplace of Aceh's rebel movement, rounding up people and torching homes.

The police were sniffing out members of the Free Aceh Movement (GAM), which inked a peace pact with the Jakarta government one year ago this week to end 29 years of conflict that had left 15,000 people dead.

"Everybody here was considered GAM... Brimob charged into the village like blind pigs and burnt down our houses. It was a very traumatic experience," says Mahmud, a 37-year-old farmer, referring to the feared Indonesian force.

That was a particularly memorable attack in Labu Adang village. But over three decades, ordinary life too became a distant memory. "Going to the rice fields, going to the hills, all our movements were limited," Mahmud says.

"If Brimob saw our pick-up loaded with rice, they would arrest us, asking for bribes," chimes in Nyok Aloh, who is just back from the fields. "It scares me to remember the way our people were killed in the conflict. Now we are all traumatised. Every time a green uniform comes to the village we think of death."

Today the rice paddies are greening in Tiro, a group of villages on the east coast of Aceh on Sumatra island's northern tip. It was here in 1976 that rebel leader Hasan Tiro declared the creation of GAM, ensuring a violent destiny for the villagers: hundreds of killings, abductions, destruction and forced labour.

But instead of harvesting their crops gripped by terror, villagers across Tiro are gratefully reaping a peace dividend this year, with the trauma starting to ebb away as the local economy picks up pace.

Farmer Mahmud says his income has picked up by a quarter since a year ago. "Before, I would sometimes stay up to one week at home without working in the paddies because of gunfights," he says, gesturing to hills once used as a training ground by GAM fighters and skirted by abandoned betel and cocoa plantations.

Eleven-year-old Tut Nurfinda, wearing her crisp blue-and-white school uniform, says she now walks to school without being afraid. "Sometimes we would hear gunshots. I would fall face down on the road, it was so scary," she remembers.

Back then, a 10-kilometre (six-mile) motorbike ride with the risk of being caught in crossfire was often too much for teacher Rohana, who used to frequently skip school, along with many of her students. "Many students had relatives killed, abducted or tortured," she recalls. "They just could not concentrate."

Tiro today hosts 150 ex-combatants, most of them farmers. Since last year, dialogue with the police has improved, as both sides regularly meet for steaming cups of Aceh's famed coffee, they say.

Tiro police chief Idris Ousmani is providing commentary at a soccer match between police and ex-fighters from a wooden and palm leaf shack at Tiro's main pitch. Pausing a moment, he tells AFP: "Before, we were like water and oil. Now we're like egg yolk and white... We are complementary."

Ousmani says that the situation improved when the almost 6,000 police stationed from outside Aceh were pulled out by the central government, as required under the peace pact. Almost 26,000 troops were also redeployed. "Now they have gone, things are much smoother between us and GAM," he says.

Mirza Ismail, the GAM representative to the foreign monitors' district office, says that both sides have been cooperating to identify people carrying weapons, whether they are ex-rebels or criminals. "I can reach the district police head at any time, even 2:00 am in the morning," he says.

Still, worries persist in Tiro over Aceh's political future, exacerbated by a dispute over the government's passage of a new law giving the province greater self-rule, which was passed in July after months of delay.

The law was required under the peace pact, and paves the way for local elections due to be held before December. Under the deal signed in Helsinki, GAM dropped its demand for independence in return for greater autonomy and the right to form local political parties which are banned elsewhere in Indonesia.

But GAM has expressed dismay at some of the law's provisions and wants amendments. "We're in peace, but we are disappointed," says 40-year-old Abdullah Usman, the head of Tiro's Menassa Pana village.

GAM officials and activists argue the law curtails the power of the local administration in international cooperation and management of its national resources, while potentially strengthening the military's role in Aceh. "Was it planned so the conflict is perpetuated?" wonders Abdullah.

Tiro's former rebels say they would be prepared to resume fighting. "If the people of Aceh ask us, we are ready to fight again," warns Tiro's ex-GAM commander Iskandar Daud.

Fakruddin Muhamad, a 26-year-old ex-guerrilla with a bullet permanently lodged in his kidney that prevents him from working too long in the fields, would also pick up arms again. "If our leaders want it, I am ready," he says.

In Aceh's capital of Banda Aceh, GAM negotiator and deputy spokesperson Munawar Liza Zain says GAM may not have the power to control the emotions of the Acehnese, but "we are committed not to use weapons".

"We are going to use non-violent political channels" to sort out differences with the government, he adds. Head of the foreign monitors Pieter Feith, who believes "there has been remarkable progress achieved in a very short time", says GAM can seek redress using democratic, parliamentary means provided by the constitution. "The security situation in Aceh is stable and there is no reason to believe this would change," he says.

In Tiro, despite the anger at the new law, a resumption of the conflict seems out of the question for many. Irwandi, 27, gave up fighting to sell fish at the Tiro market. "I just want things to stay as they are now. I don't want war again," he says, sitting among the local crowd cheering a soccer match.