Increasingly, though, the battle for the soul of Indonesia looks to be painted in shades of green–the flags of militant Islamists versus the camouflage of the Army. “The government’s weakness is breeding radicals,” says Ulil Abshar-Abdalla, head of a moderate Muslim group. That’s true on both sides: without effective civilian leadership, the debate over which kind of country Indonesia should be is slowly being ceded to fire-breathing fundamentalists and their opponents in the military.

The two camps have been wary of each other since the early days of the Indonesian republic. Now their relationship has taken on a critical significance. With more than 85 percent of its 215 million people professing some form of Islam, the archipelago is the world’s most populous Muslim nation. As during the Vietnam War–when the country was seen as a key domino in the anti-communist fight–Washington believes Indonesia occupies a pivotal place in the struggle against Islamic extremism. “If Jakarta can pull off this democratic transition successfully, Indonesia will be a positive role model for the world’s Muslims,” says U.S. Deputy Secretary of Defense Paul Wolfowitz.

Of course, the picture of a spreading fundamentalism in Indonesia is distorted by the magnifying glass of September 11. As the United States began to bomb Afghanistan, a few spirited crowds rallied in front of the U.S. Embassy in Jakarta. Firebrands like Laskar Jihad founder Jafar Umar Thalib denounced America, and other militants launched recruitment drives for the Taliban. Those looking for radical madrasas found one in the town of Solo, where a cleric named Abu Bakar Bashir is accused of leading a terrorist ring that had cells in Malaysia, the Philippines and Singapore. (Even today students at his Al Mukmin boarding school wear Osama bin Laden T shirts and insist that Washington “has no proof” Al Qaeda was behind the September 11 attacks.) A good deal of the Islamic militancy on display since last fall cannot be separated from hype and a broader anti-Americanism.

Yet a more subtle shift is taking place as well. Since independence Indonesian leaders have promoted a secular nationalism–not religion–as the only glue that can hold together their far-flung and dazzlingly diverse country. For his three decades in power, Suharto brutally enforced allegiance to the national mythology of pancasila–the “five principles” of civility, national unity, democracy, social justice and belief in one God. But Indonesia’s post-Suharto presidents–the buffoonish B. J. Habibie and Abdurrahman Wahid, the inscrutable Megawati Sukarnoputri–have proved a weak bunch, more concerned with internal political squabbles than able to articulate a broad new vision for Indonesia. Pancasila has lost its luster partly out of disgust with civilian leaders and partly because it “rekindles memories of the bad old days of Suharto,” says former Defense minister Juwono Sudarsono.

That has allowed other forces to push their own agendas, including, most recently, fundamentalist Muslim groups that had typically not found much of an audience among the country’s open-minded faithful. In a survey conducted by the Center for International Cooperation last December, 58 percent of respondents said they favored the implementation of Sharia (Islamic law) throughout the country. Nearly three in four supported making Indonesia an Islamic state, while 62 percent said that Islamic fundamentalism was needed in a society that had grown immoral. A mild form of Sharia is now practiced in the province of Aceh, and has been or is being introduced in districts in Java, West Sumatra and Sulawesi. Some Muslim parties in Parliament are pushing to reinstate a clause in the Constitution, known as the Jakarta Charter, that calls for “Sharia law for religious followers.”

Much of the new religiosity stems from a desire for order amid the apparent cha-os spread by Suharto’s downfall. When probed more closely, most Indonesians say they do not approve of draconian punishments like stoning adulterers to death or amputating the hands of thieves. Instead their embrace of religious law is a measure of widespread dismay at the failure of civilian institutions. “The state apparatus is weak, and the vacuum is filled by radical groups which are small but vocal,” says Ahmad Syafii Maarif, the chairman of Muhammadiyah, the country’s second largest moderate Muslim organization.

Groups like the Justice Party, which holds seven seats in Parliament, have begun to provide social services in villages ignored by the central government. Others have assigned to themselves more controversial tasks, like fighting crime. In some cities and towns, vigilante justice is dispensed by Muslim radicals. The Java-based Islamic Defenders’ Front, which made a name for itself by trashing discos and hunting for American guests at local hotels, claims to have performed at least 100 of its “sweeps” since September 11–the latest a raid on a Chinese-owned warehouse found to contain 8,000 bottles of alcohol. “It’s obvious the owner was out to destroy national morality,” says Jafar Siddiq, who has led several such sweeps. “Since the police are also fighting porn, prostitution, gambling, alcohol and drugs, they’ve been kind to us. Our goals are the same.”

Perhaps an even greater share of the popularity of radical Islam has to do with more ephemeral issues of identity and self-esteem. Indonesians, says Sudarsono, are seeking solace in religion “because of the trials and tribulations of economic displacement. There’s a fad with Islam.” Indeed, Muslim symbology has become downright trendy over the last year. Islamic music is newly popular. Muslim preachers appear on TV with smartly produced, viewer-friendly sermons that sound like self-help infomercials. Corporate managers have been flocking to something called the “Emotional Spiritual Quotient Leadership Center,” which provides Islam-based management-training seminars.

Mainstream politicians have begun to take notice. Religiously defined candidates have traditionally not done well in Indonesian elections. In 1999, the most prominent Islamic parties–the PPP, led by Vice President Hamzah Haz, and the Crescent and Star Party–took only 11 percent of the seats in Parliament; even the Justice Party, which claims to have been the most successful new party in the 1999 polls, won only 1.4 percent of the vote. Yet Megawati and other secular leaders have been painfully reluctant to criticize the more outspoken fundamentalists. Mega, says one Western diplomat in Jakarta, is “not even reactive, much less proactive” when it comes to taking on the Islamists. That has allowed figures like Haz, who is facing a leadership challenge within his own party, to stake out extreme positions: in recent weeks he has visited Laskar’s Thalib in detention, and Bashir at his madrasa in Solo. (“I call on the authorities to arrest me first before arresting them,” says Haz.) Secular and moderate Muslim parties still dominate Parliament. But, says former president Wahid, “Muslim hard-liners are better recognized and better financed. They look like a threat.”

Indonesia has been here before. In the mid-1900s, another period of rapid social change and economic turmoil, various Islamic groups flourished in the anti-colonial struggle against the Dutch. In the rocky early years after independence in 1949, when Sukarno’s scattershot rule helped fuel separatist movements across the archipelago, a Pan-Islamic organization called Darul Islam, which envisaged an Islamic state encompassing Indonesia and Malaysia, was ruthlessly suppressed by the Army. Bashir was allegedly a member of the organization. The current Muslim revival, says Sudarsono, represents a “cycle that repeats itself every 40 years or so.”

What’s most worrying this time is not the plethora of firebrands denouncing U.S. imperialism; if he were alive, Sukarno would be Indonesia’s most eloquent anti-Western spokesman. Instead it’s what these subtle changes say about where the country is heading. Most Indonesians would call themselves Abangan Muslims, who have fused a tolerant form of Islam with the beliefs of Buddhism, Hinduism and Javanese mysticism. Those who espouse a stricter interpretation of the Qur’an are increasingly drawn from a younger, well-educated, more tech-savvy generation. Amien Rais, former head of Muhammadiyah, says that militant clerics “recruit followers from campuses. Students in engineering and architecture are particularly vulnerable… They want life to be exact, black and white.” The Justice Party got its start in a Muslim Internet forum, and most of its 300,000 members are between the ages of 20 and 35. Many of these believers are too young to have taken part in the political system or been indoctrinated in pancasila. They are turning to Islam at a time when the religion seems better suited to expressing their frustrations than a more inchoate nationalism.

The armed forces, on the other hand, are looking to turn back the clock. Top brass argue that the Islamic threat demands an all-too-familiar degree of military involvement. The generals “fear the new radical [Muslim] leaders coming up in the next 10 to 20 years,” says a senior active-duty officer. “I fear that nationalism is becoming weaker because of missteps in building democracy in Indonesia. [It’s gone] too fast and too far.” NEWSWEEK has learned that some officers have hatched a secret plan to help rally moderate Muslim organizations to challenge Islamic militants. Part of the strategy involves attracting international funding–U.S. officials have reportedly been briefed on the plan–to open madrasas that will teach a more inclusive form of Islam. The echoes of the military’s Suharto-era sway over domestic politics are clear and a bit chilling. “It should be the job of the government, not the armed forces, to take the lead in this sort of thing,” says one Western diplomat in Jakarta.

The military’s renewed prominence poses a challenge for Washington. There is bipartisan agreement that the United States needs the help of Indonesia and other moderate Muslim nations in order to “bridge the dangerous gap between the U.S. and Muslims around the world,” as Wolfowitz puts it. Washington has approved a plan to help train an elite Indonesian counterterrorism unit. The Bush administration is pushing for funding to help the Indonesian military organize internal peacekeepers for deployment to hot spots like Aceh and the Malukus. Hawks have raised the possibility of resuming direct military aid to Jakarta–suspended because of human-rights abuses in East Timor–and allowing Indonesian officers to train in the United States. But some Democrats worry that such ties would only derail the molasses-slow process of military reform.

It’s unclear, in fact, whether the cure wouldn’t prove worse than the disease. Most analysts put the chances of Muslim radicals’ taking power in Indonesia at slim to none–unless they are persecuted and their ranks swell out of sympathy. “Now people worry that [the military] will become part of the problem, especially if it cracks down hard on Muslim extremists,” says a regional-security expert. Civilian leaders should take note: only once the vast middle ground of Indonesians is satisfied with their livelihoods and their governance will those at either extreme–military or Muslim–be put in their place.