Succumbing to protests, President Suharto announced plans Tuesday to end his 32-year authoritarian rule, saying he would step down after introducing long called-for political reforms and holding parliamentary elections.
In a somber, 15-minute nationally televised speech, Suharto said elections would be held "as soon as possible" - but skeptical student leaders said they would step up anti-government protests.Up to 15,000 students besieged Parliament Tuesday, swarming over the legislative complex to demand that Suharto quit now.
Some feared the reform process could take months under the powerful pro-Suharto military, wasting valuable time as Indonesia struggles with its worst economic crisis and social unrest in decades.
"The economy is finished, and the government is responsible," said Muhammud Yusuf, 28, a satellite communications engineer. "The government is corrupt, and the problem is the system. We must cleanse the system."
The decision by 76-year-old Suharto to relinquish power followed months of street protests and a week of rioting in which 500 people were killed and thousands of buildings were looted and torched in Jakarta.
Students called Tuesday for a massive protest in the main square facing the presidential palace on Wednesday - the anniversary of Indonesia's nationalist movement - a rally that military commanders fear will lead to new rioting.
Amien Rais, the main opposition leader who is promoting himself as a possible future president, said Suharto's offer of reforms and new elections was "disappointing" and showed that the autocrat was "full of illusions and hallucination."
He predicted 1 million protesters would turn out Wednesday.
"(Suharto) will be defeated very soon," Rais told reporters. "He does not know what is going on in his own society."
About 100 protesting students climbed on to the roof of Parliament Tuesday, waving flags and banners, while others staged a sit-in on the ground floor. One group even whisked an official portrait of Suharto out of the building.
"Change Suharto right now!" the students chanted in front of a line of soldiers.
Troops and tanks were deployed Tuesday throughout the battered capital, and fearful residents stocked up on food and other supplies.
In Surabaya, Indonesia's second-largest city, soldiers with sticks beat students Tuesday during a rally against Suharto, injuring 19 protesters. Protests were also reported at several campuses around the capital.
In his speech, Suharto said he will remain in office while he readies this nation of 202 million people for a new political era.
"I will not be prepared to be elected any more," he said. "I have taken the decision as president to implement and lead the national reform immediately."
From Singapore to Seoul, Asia's battered markets took heart from Suharto's announcement.
Nowhere was the reaction as strong as in beleaguered Indonesia. Although trading volume was low, the JSX Composite Index surged 6 percent on Suharto's announcement. Indonesia's currency, which had touched 14,000 rupiah against the dollar, rebounded to 12,125.
Suharto said he would appoint a special reform council to draft new laws for the elections and change the structure of Parliament. After the election, a new president would be appointed later by a special assembly, made up of lawmakers and government appointees.