JAKARTA -- According to legend, the fabled King Aji Caka of Java gave two daggers to his faithful servant and ordered him not to surrender them to anyone but the king himself. Later, the king sent another servant to retrieve the daggers, and the two aides ended up stabbing each other to death -- each firmly believing that he was acting on the king's instructions.

President Suharto, now completing his 20th year as president since taking power in a military coup, is in many ways a modern-day King Aji Caka: he is surrounded by faithful aides who pursue seemingly contradictory policies on the belief that they are acting at the president's behest. This official ambivalence helps explain the hints of openness that have begun to appear in Indonesia's rigid, military dominated political system while the government appears to be tightening its grip by such acts as closing down the widely read daily newspaper Prioritas last summer because of its criticisms of the government.

In essence, Indonesia, a major oil producer and the world's largest Moslem country, seems to be trying to balance the growing demands for more openness and free expression -- especially among a younger, better-educated and more affluent generation -- against the older generation's memories of the chaos that occurred here during the country's experiment with western-style liberal democracy in the late 1940s and '50s.

"It's like trying to move a dinosaur -- it doesn't have great momentum," said Rachmat Witoelar, a spokesman for a group of young reformers in the parliament's ruling Golkar party. "There's an inertia from the old ways of thinking. Conditioned reflexes are still there. For example, if a newspaper gets out of line, the first reaction is to close it down."

"The older generation is schizophrenic, allowing some of this {openness} but at the same time trying to suppress it," said Slamet Bratanata, a former government official turned dissident, who is now effectively barred from participating in active politics. "It's as subtle as the Indonesian shadow play, the wayang. What can be more subtle than the shadow?"

Parliament seems to be the primary focal point for the new openness. Once only a rubber-stamp body to ratify the decrees of Suharto's government ministers, the new parliament that was elected last April has become more vocal, with members now frequently quoted in the newspapers. Many openly criticize, among other things, rampant corruption in government -- and they come perilously close to violating Indonesia's most sacred official taboo, prohibiting direct criticism of the president and his family.

The 500-member parliament has more younger members than previously and twice as many representatives of the small, reformist Indonesian Democratic Party (PDI), a collection of liberal parties allied with the late president Sukarno. There are now 40 PDI members.

The most outspoken group in parliament, however, appears to be the 100 appointed representatives of the Indonesian military, which is called "Abri" here. The Abri faction, together with PDI members, appears to have emerged as something of a counterweight to the ruling Golkar party, which has 299 parliamentary seats. Golkar, in turn, appears to have become more bureaucratic and less a creature of the military, as evidenced by the fact that Golkar was able to win more than 70 percent of the vote in April even as the armed forces took an unprecedented hands-off attitude.

The government still can be expected to win any major legislation that it proposes to parliament, but Indonesian political analysts, who have grown accustomed to reading the shadows for any sign of subtle shifts, have begun to tune in on the sideshows and debates in parliament. "I notice greater activity in parliament," observed one seasoned Asian diplomat here. "Even attendance is up."

"There are a lot more people speaking to the press," said Witoelar. "They are encouraged to speak out. If we can be more vocal, the parliament will have more credibility, and the government will give us more respect."

Outside parliament, there are other, more subtle signs of openness -- signs that are less visible than the parliamentary debates but are striking even to a second-time visitor here. For example, Tempo magazine, a respected news weekly, recently ran a cover story and an eight-page spread with photographs on an early November riot by thousands of students from several college campuses in Ujung Pandang, in southern Celebes. At least three students were killed, apparently by government troops called in to restore order.

In the past, such stories about internal disturbances were almost always suppressed, and very little about the Ujung Pandang incident appeared in Indonesia's newspapers. But analysts here noted with interest that Tempo was not punished for its story. Tempo editor Fikri Jufri said he did not even receive so much as a warning from the government after the story appeared.

Only a week later, Tempo ran another story, with a photograph, on the involvement of Suharto's son, Bambang Trihatmodjo, in a potentially lucrative new cable television project that will give Jakarta residents their first private TV channel with paid advertisements. Stories about the first family's business deals, derisively known as "public secrets" here, almost always bring official sanction, and foreign reporters are routinely if discreetly warned to steer clear of the topic. Again, however, Tempo was neither warned nor punished.

Most analysts and diplomatic observers here said the new openness seems to reflect a conscious decision on the part of the armed forces to experiment with a little more freedom. One foreign diplomat here noted that since leading the fight for independence from the Dutch in the 1940s, the Abri -- unlike other Third World militaries -- has considered itself to be in the forefront of populist progressive change.

Some analysts suggested that, by allowing more freedom, the Abri, particularly under the influence of a younger generation of officers, may be trying to avoid the kind of violent student-led demonstrations for democracy such as occurred this summer in South Korea, where a military-dominated government was forced to reform its system to allow free presidential elections and other democratic changes.

"Korea has been talked about very much," said one high-ranking Golkar member. He asked not to be named because he no longer holds an official party position. "Everybody, including Abri, has warned people what can happen if we fail to address the changes in politics. . . . Korea didn't do that. They just took it for granted that everything would be okay with economic development."

"There is widespread dissatisfaction with the younger people who are looking for a means of self-expression," Witoelar said. "We have to look out. We have to grasp what they really want. The younger our people are, the less confidence they have in the system."

Witoelar and others interviewed here agreed that the differences between South Korea and Indonesia outweigh their similarities, primarily because of the Javanese belief in finding consensus and because of Indonesians' seemingly inexhaustible reservoir of patience. But most saw the Ujung Pandang riot and two other student protests that also took place in November as dangerous signs that the people's patience may be wearing thin.

"We are very patient people," Witoelar said. "That is putting it mildly. Maybe you need to call it lethargic. {But} that is dangerous because it is a time bomb ticking. After a while, people get fed up to their necks and they blow up and go amok."