Interview: Order In The House; Indonesia's hard-charging president on reform, internal resistance, and countering the country's Muslim radicals.(Interview)

Byline: George Wehrfritz and Joe Cochrane

Indonesian President Susilo Bambang Yudhoyono stormed into office nearly 18 months ago--and has not stopped running since. The former Army general took power at a time when the world's fourth largest nation was threatened by economic stagnation, lawlessness and terrorism. Affectionately known as "SBY" by the public, Yudhoyono is pushing painful reforms--raising electricity rates, revamping the civil service, rewriting tax laws, imposing civilian control over the maverick armed forces and working to bring peace to rebellious provinces like Aceh. He spoke with NEWSWEEK's George Wehrfritz and Joe Cochrane at the Presidential Palace in Jakarta last week. Excerpts:

NEWSWEEK: How significant is the Aceh deal for Indonesia's future stability?

YUDHOYONO: "We tried military options in Aceh for three decades but it doesn't work. I saw an opportunity to eliminate the problem peacefully, constitutionally, and it is working. I can now tell our people that we must change the internal-security paradigm, and I will apply this new method of conflict [resolution] in [separatist] West Papua, for example.

Do recent uproars, like the Muhammad cartoon controversy, hurt your efforts to check Islamic extremism?

I have to deal with extremists firmly. The situations in Iraq, Afghanistan, Palestine and Iran have become the main concern of several Islamic elements in Indonesia, so when the cartoon depicting the Prophet Muhammad ...