But it was unclear whether that would satisfy critics of the government especially students, whose protests flared again in Jakarta and two other cities to demand faster changes. There were also reports of a riot on the island of Sumatra.
The students don't trust President B.J. Habibie a longtime friend of former President Suharto to oversee the reforms and want an electoral assembly convened immediately to choose a new president.
Their movement is far from dead, even though Suharto whom they targeted for three months in near-daily rallies stepped down May 21 following overwhelming demands for him to quit. More than 500 people died in the violence that preceded his resignation.
About 400 students rallied Thursday outside parliament's main gate, while Habibie met with senior lawmakers inside. "Bring down Habibie right now!" they chanted. Student demonstrations were also reported in the cities of Surabaya and Yogyakarta.
But the protests lacked the huge numbers of past weeks. The students, who once hurled epithets at Suharto, a 76-year-old former army general, simply switched names Thursday. "Hang Habibie!" they chanted outside parliament, many standing on the roofs of buses and waving red and white Indonesian flags.
This time around, the students have far less support for their campaign against Habibie, with many government critics saying the new president should be given leeway to enact reforms. Shaken by the violence, many Indonesians are also unwilling to risk more unrest.
Despite the student protests, British Deputy Foreign Minister Derek Fatchett hailed Habibie's plan to enact new electoral laws, followed by elections at some still unspecified time in 1999.
"Those are very good signs of progress," Fatchett said after talks with Habibie. "It would be preferable to have those elections as early as possible in 1999."
A prominent opposition figure and Muslim leader, Amien Rais, welcomed Habibie's plan as "the only way to go."
Parliament Speaker Harmoko said new electoral laws would liberalize Indonesia's tightly controlled political system, set up by Suharto in the early 1970s to cement his grip on power.
"This is proof of the reform spirit," Harmoko told a news conference.
He said a special session of the People's Consultative Assembly, made up of 500 lawmakers and 500 government appointees, would convene at the end of this year or in early 1999 to set a polling date.
After the election, new members of Parliament would join the assembly to select a new president.
It was unclear whether Habibie would run for the office he now holds.
In the eight days since he assumed the presidency, Habibie has tried to break with Suharto's legacy, promising not ony political reforms but sweeping economic changes that Suharto resisted to protect his family's huge wealth.
On Thursday, Habibie met with a senior International Monetary Fund officials to try to revive a $43 billion bailout plan.
He also released two more political prisoners, bringing to four the number freed since he was sworn in after Suharto quit. More than 200 remain behind bars.
Meanwhile, police were patrolling the Sumatra island town of Tanjungbalai, 800 miles northwest of Jakarta, after a protest against government corruption turned into the first riot since Suharto quit.
The official Antara news agency reported nine people were injured by police gunfire and 107 were arrested in Wednesday's violence.
At least 104 shops were damaged or burned, many of them owned by the ethnic Chinese minority, who dominate Indonesian commerce.
Written by Geoff Spencer ©1998 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed