Merapi has been sending out gas and lava since May
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The Indonesian authorities have downgraded the alert status for Mount Merapi after a recent decrease in volcanic activity.
The central Java volcano began emitting gas clouds, ash and streams of lava in May, prompting scientists to declare the highest alert level.
The latest decision means residents who were taken away from Merapi's slopes can return to their homes.
But officials warned people not to get too close to the restive mountain.
Government volcanologist Subandrio confirmed the decision to lower the alert.
"There have been no more hot clouds in the past two days, while avalanches of hot lava also have decreased in both frequency and reach," the Associated Press news agency quoted him as saying.
But officials said this did not mean the danger was over.
Thousands of residents were forced to leave their homes
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"People are advised not to get nearer than 8km (five miles) from Merapi's peak," an expert from the Yogyakarta volcanology office told AFP.
Merapi, which means "mountain of fire", is one of the most fearsome volcanoes in the Pacific "Ring of Fire".
Two men died on the mountain in June when they became trapped by volcanic debris while sheltering in a bunker.
Thousands of residents had to leave their homes and move to temporary camps to avoid the clouds of hot gas, ash and other debris.