The deal, signed in August and seen as the best chance yet of ending a nearly three-decade conflict that claimed some 15,000 lives, has held firm with both sides taking risks to implement more than they pledged, the report from the International Crisis Group (ICG) said.

"Those risks appear to have paid off. The threat of militia violence has not materialised, and amnestied prisoners have returned home without incident," the Brussels-based organisation said in a statement accompanying the report.

Under the deal signed in Helsinki, the rebels' major concession was to drop their demand for independence, while the government finally agreed to grant former fighters amnesties and allow them to start a local political party.

It also pledged to withdraw its non-local military and police forces from Aceh by the end of 2005 while rebels agreed to disarm.

The ICG warned however that attention must now focus on the reintegration of former Free Aceh Movement (GAM) fighters, while a potentially controversial law incorporating the agreement must still be finalised and passed by parliament.

"The transformation of GAM from an armed movement to a political one hinges on this law, particularly its provisions on local political parties and the mechanics of local elections," the statement said.

"The question is whether the parliament will accept the Acehnese draft without serious revisions."

The ICG noted that a fresh potential sticking point issue had recently emerged: whether there will be a provision in the law allowing for staunchly Muslim Aceh to be divided into further provinces in the future.

Two areas of Aceh -- the highlands and part of the west coast, comprising 11 of Aceh's 20 districts -- have argued in the past that they should be split to form their own province, but GAM has opposed this.

"Such a reference (to allowing division) could undermine the consensus in Aceh around the current draft and ultimately, the peace itself," the group warned, adding however that it was upbeat on prospects.

"Since wiser heads have prevailed thus far every time a potential obstacle has arisen, there is every reason to believe that a way will be found around this problem, too."

Many former fighters had returned to their communities but most were unemployed. Disagreements between GAM leaders and the government over the method of making cash payments to ease reintegration were holding up programs to establish new livelihoods, the report said.

"If the problem is not resolved, the danger in the long term is that bored or jobless ex-combatants will turn to crime or seek to resume fighting."

The issue has raised questions such as whether GAM trusts the government enough to release the names of potential recipients and whether the government would convert those names into a hit list if hostilities resumed.

"The questions raised over the course of debate on this issue speak volumes about the reservoir of distrust that still has to be drained," the report said.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.