More than 1,000 elite soldiers landed in the province by sea and air in an operation to "destroy" the Acehnese rebels in what was expected to be Indonesia's biggest military operation since its invasion of East Timor in 1975.
The peace talks in Tokyo fell apart when the rebels rejected Jakarta's demands to lay down their weapons, drop their independence bid and accept regional autonomy. The rebels vowed to resist any attack by the military and to fight on for independence.
President Megawati Sukarnoputri signed a decree late Sunday authorizing war in the oil- and gas-rich province and imposing martial law. The order gave the Indonesian military sweeping powers to make arrests, impose curfews and curb travel in and out of the province. The military immediately arrested five senior rebels.
On Monday, Indonesian planes fired the rockets at a rebel stronghold about 12 miles east of the provincial capital of Banda Aceh, said Maj. Gen. Erwin Sujono.
"The offensive has begun," Sujono said in Banda Aceh.
Earlier Monday, hundreds of troops parachuted into the province in a show of force. Six C-130 Hercules transport aircraft released 458 soldiers over an airstrip close to Banda Aceh.
In the north of the province more than 600 marines landed from one of 15 warships off the region's northern coast, an area with a heavy concentration of rebels, Sujono said.
By late afternoon, there had been no rebel casualites reported and troops were meeting minimal resistance, said Maj. Gen. Syafrie Syamsuddin. One Indonesian marine was killed in an accident while landing on a beach in bad weather, he said.
"I have ordered soldiers to hunt for those (rebels) who refuse to surrender ... hunt for them and destroy them to their roots," said Indonesian military chief Gen. Endriartono Sutarto.
There are more than 30,000 government troops in Aceh, up against about 5,000 poorly armed rebels.
The government estimated that the number of refugees in Aceh will balloon to 100,000 from the current 5,000.
"The government has prepared medical supplies, clothing, sheets, food, rice, 4,000 tents and medicines," Social Affairs Minister Bachtiar Chamsyah said.
Monday's attack signaled a return to military confrontation following a Dec. 9 peace agreement between the government and the Free Aceh Movement that raised hopes for a breakthrough in one of Asia's longest running separatist conflicts.
The accord unraveled in recent months following violence by both sides and mutual recriminations.
More than 12,000 people have died in fighting since 1976 in the province, province 1,200 miles northwest of Jakarta, amid accusations of atrocities on both sides.
On Monday, a body with gunshot wounds was found near Banda Aceh while in northern Aceh unidentified gunmen shot dead a man riding a motorbike with his wife. The circumstances surrounding both deaths were unclear.
Monday's attack using U.S.-made OV-10 Bronco attack planes was the first time in several years that the military has used air-to-surface missiles in Aceh. It was unclear if there were any casualties in the attack which the military said targeted an alleged weapons cache in the rebel camp.
The Tokyo talks over the weekend had been arranged hastily under pressure from international donors alarmed by the prospect of renewed fighting. Even as the two sides talked, thousands of Indonesian troops massed in the province.
A statement Monday by the co-chairs of the Tokyo talks — the European Union, Japan, the United States and the World Bank — urged both parties "to leave the door open to further dialogue" and said a peaceful solution is still possible, "even at this late hour."
The co-chairs "deeply regret that the government of Indonesia and the Free Aceh Movement failed to seize the unique opportunity before them ... ," the statement said.
Rebel leader Malik Mahmud said he believed the Indonesian government was "looking for a way to declare war" and had no intention of compromising.
"They asked us to surrender," said Mahmud, who vowed resistance to government troops.
"We will fight for independence," he said.
Shortly after martial law was declared Monday, armed officers barged into a hotel in Banda Aceh where the five rebel leaders were staying and took them to regional police headquarters, witnesses said.
Col. Surya Darma, Aceh's chief police detective, said the five rebels were officially named as suspects Monday in a series of recent bomb attacks in Indonesia.
By Lely T. Djuhari