Thousands march on Indonesian president's palace

Thousands of students have rallied outside the Indonesian state palace on Monday and demanded President Abdurrahman Wahid quit.

The protest caused jittery financial markets to plunge amid fears of a new round of unrest.

Brokers were alarmed by the protests and the value of the currency and stocks dropped dramatically in morning trading to hit their lowest levels in more than two years.

The central bank admitted it could do little to bolster the rupiah, which has already been battered by deteriorating relations with the International Monetary Fund.

Adding to the anxiety was a warning from the government's security minister that Indonesia could fall apart if its security and political problems were not fixed quickly.

There was no immediate comment from President Wahid, who has steadfastly maintained that he will stay in office.

More than 10,000 demonstrators gathered in front of his white-columned residence. Thousands more rallied at campuses across the capital and staged street marches.

Scores of riot police and soldiers guarded the palace and kept the students apart from a small group of the president's supporters.

Organisers of Monday's protests had originally called for a national strike. The capital was quiet, however, and many offices and stores were open as usual.

President Wahid, who came to office 17 months ago as Indonesia's first freely-chosen president in more than four decades, has been resisting increasing demands that he resign over a range of political, economic and social crises that have triggered communal violence in several troubled areas.