By Keith B. Richburg
Washington Post Foreign Service
Wednesday, May 20, 1998; Page A01

JAKARTA, Indonesia, May 20 (Wednesday)—Thousands of cheering, chanting students continued their occupation of the Indonesian parliament grounds this morning -- their ranks bolstered by hundreds more young students arriving by the hour -- in an extraordinary show of "People Power" defiance of President Suharto and his plan to stay in office long enough to oversee a gradual transition to a new, elected leadership.

But a massive military clampdown on the capital prevented a planned anti-government march that had been expected to draw a million people into the streets. The entire downtown section of the city was sealed off today by barbed-wire barricades, and tanks guarded the major routes to key government monuments and the presidential palace.

With the rally canceled, the parliament building and surrounding grounds became the new focal point of the students' anti-government protest -- drawing comparisons to the way Beijing's Tiananmen Square became the venue for a 1989 student uprising that ended in violence. Troops have taken up positions around the parliament grounds, blocking traffic along a major highway that runs past the complex. But the soldiers were not preventing newly arriving students from entering the compound through gates after showing their school identification cards.

By midday, thousands of non-students gathered around the perimeter of the parliament grounds, shouting support for the students, chanting "Reformsi, Reformsi, Reformsi," and hurling insults at soldiers who formed a ring around the compound.

Organizers said they called off today's planned march to avoid the risk of confrontation with the troops and a continuation of violence that led to the deaths of more than 500 rioters last week. "Since midnight, I have been observing the military preparations to crack down on the people who are going to the demonstrations," said march organizer and Muslim leader Amien Rais.

Rais, opposition politician Megawati Sukarnoputri and other prominent anti-government political and religious leaders planned to converge on the parliament building for what was expected to be a mass anti-government rally. Today is the 90th anniversary of the birth of Indonesia's nationalist movement against Dutch colonial rule.

The protesters are demanding that Suharto step down immediately, dismissing his proposal for a gradual transition as a stalling tactic that could allow him to cling to power for months. Many fear the defiance of the students and the political opposition will ultimately lead to new confrontation with the nation's powerful military, which is seen as backing Suharto's plan for a slow turnover of power as a way to avoid the chaos of a leadership vacuum that an immediate resignation might bring.

The Jakarta Post summed up the tense mood here in an editorial this morning headlined, "More turmoil ahead?" "As the crisis of confidence in the government reaches extreme proportions, many critics are no longer willing to put their trust in the president's integrity, suspecting he might merely be trying to buy time with his latest reform plan," the editorial said. "It looks as if we may be heading toward a time of mounting pressure, growing disorder and economic distress."

Suharto stunned the nation Tuesday morning by saying he had heard the calls for his resignation and had no interest in staying in power against the popular will. "There is no need to worry that I will defend my right to the presidency," Suharto said, looking relaxed and smiling benevolently. "I do not feel the honor of being a simple citizen is any less than the honor of being president. Let me not stand in the way of the desires of our people."

He then promised to set up a "reform council" that will draw up plans for new elections to be held "as quickly as possible," and said the parliament elected at that time would choose the country's new leadership. But he gave no timetable for the transition and said that "at the moment, I remain president." He said he plans to name a "reform cabinet" to help him begin implementing needed changes.

At first, many viewed Suharto's resignation pledge as momentous, bringing an end to an era that began 32 years ago when the former general took power against the backdrop of similar economic and political turmoil. Some analysts said his proposal for a stage-managed resignation, and his insistence on adhering to the constitution, were aimed at allowing himself a graceful, face-saving exit while leaving him some say in choosing his successor -- and enough time to guarantee that his family's considerable business interests are protected.

"That's the best thing we can have now -- the maximum we can have -- so nobody loses face," said Salim Said, a political scientist and expert on the Indonesian military. "This shows you that Suharto is still a great politician. We were about to write the requiem for Suharto. But he has found a way out that to most reasonable people is the maximum we can achieve."

Juwono Sudarsono, an academic who became minister of state for the environment in March, said that under the plan, Suharto would be out of office by the end of the year. But Juwono, in a television interview, said Suharto was trying to balance two conflicting interests: "On the one hand, the students want him to resign immediately. On the other hand, the armed forces wants to have a gradual and constitutional change." He said there are fears a precipitous resignation "would lead to greater chaos and disintegration of the nation."

But Suharto's growing number of critics -- including students on the streets and opposition politicians trying to harness the popular discontent -- viewed the president's plans for a managed transition with suspicion. His opponents apparently sense they have seized the momentum in Indonesia's political drama, and their demands hardened on Tuesday: They would accept nothing less than the immediate resignation of both Suharto and Vice President B. J. Habibie.

"We've made it very clear we want the president to step down. And that hasn't been achieved yet," said Rinaldi, 24, a student at Yarsi University here.

The students spoke Tuesday from the expansive grounds of Indonesia's parliament, where they staged their most brazen protest to date, taking over lawns and buildings, sitting atop the arched roof of the legislative chambers and occupying the meeting rooms of the adjacent office tower. They swarmed across the grounds wearing jackets in the bright colors of their schools -- yellow for the University of Indonesia, purple for the secretarial management institute, orange for Jaya Baya University, green for the Islamic University.

They heard speeches, performed comic skits, played guitars and beat empty plastic water bottles on the ground to a rhythmic chant. Some vowed to continue their occupation until their demands are met.

Rais, who has positioned himself at the forefront of the country's fractured political opposition, said Suharto was "full of illusions and hallucination" for thinking he could stay in place to manage the transition. "He will be defeated very soon," said Rais. "He does not know what is going on in his own society." To ease fears about a leadership vacuum in the country should Suharto step down immediately, Rais offered himself as a candidate for president, saying, "I'm more than willing to replace him." Rais heads Muhammadiyah, Indonesia's second-largest Muslim organization with 28 million members.

Former cabinet member Emil Salim, also mentioned as a possible presidential replacement, was equally critical of Suharto's proposals. "The whole time frame is so dubious -- it could be short or it could be two years," Salim said at a news conference. "The dubious time frame creates this uncertainty. Uncertainty is the exact reason we have this economic and political crisis."

Some analysts said Suharto appears to be a victim of more than three decades of an aloof ruling style and a presidency largely sustained by political intrigue and secrecy.

"There's so much logic to what he is saying, but there's so much information missing," said a Western diplomat. "There's a history of misinformation -- you can't ignore that."

He added: "I'm highly cynical. I think it's a trick. I think he just wants to keep the cards that he's got -- stay in for a period, and manage a process that lines up his people. He's never quit, never run. In every spot he's been in, he's come up with a solution that's involved multiple deceptions."