International observers yesterday travelled to Aceh to lay the groundwork for the formal stationing of a peace-monitoring team in the troubled Indonesian province, where an almost two-week-old military siege of a separatist rebel base is continuing to raise tensions. The Indonesian government and the separatist Free Aceh Movement (GAM) have said they are close to signing a ceasefire that would end the 26-year conflict, which human rights groups say has left more than 1,200 people dead this year alone.

GAM, which has been seeking independence from Indonesia, declared a unilateral ceasefire for the Islamic fasting month of Ramadan, which began last week. Diplomats in Jakarta say the government of Megawati Sukarnoputri, which has offered the province limited autonomy, also appears serious about signing an accord.

Diplomats say senior members of the Indonesian military now realise they are stuck in a quagmire in Aceh which cannot be overcome militarily. But the siege at the rebel base near the industrial town of Lhokseumawe represents a potential setback to peace, and GAM's commander for north Aceh yesterday accused the military of acting in bad faith.

"We don't see any seriousness on the Indonesian military's part in resolving this conflict peacefully," said Abu Sofyan Daud. "Even if we have declared a unilateral ceasefire."

The military, which has 30,000 troops stationed in Aceh, claims it is trying to put pressure on GAM to sign a ceasefire, and accuses the rebels of using civilians as human shields. According to local reports, six civilians and two soldiers have been killed in the offensive so far.

Indonesian officials, keen to sign a ceasefire before Ramadan, were frustrated when GAM negotiators pushed to delay the deal until after the fasting period. GAM officials are understood to be concerned about turning over their weapons, and they want immunity from police prosecution.

The siege, however, has escalated in the last week. Indonesian military leaders have admitted firing mortars and rockets at the rebel base. They believe Muzzakir Manaf, GAM's military commander, may be trapped inside.

Some now fear the military's efforts to put pressure on GAM could backfire and set off more conflict.

"These are contradictory actions - trying to reach peace through a dialogue [at the same time as] military operations”, said Maimul Fidar, a local human rights activist. “This could become a blunder for the government. Maybe GAM won’t be co-operative after this”. The Geneva-based Herny Dunant Centre, which has been helping to mediate the peace process, said it was confident a ceasefire would be signed at the end of Ramadan