BBC News' Vince Hunt on the release of the two prisoners

One is the trade union leader, Muchtar Pakpahan, who was serving a four-year prison sentence for inciting riots and also faced subversion charges for calling for democratic change.

The other, former parliamentarian Sri Bintang Pamungkas, was sentenced in 1997 for defaming the then President Suharto in a speech.

The pair were greeted by family and friends at the prison gates before being taken home.

Indonesian Justice Minister Muladi said on Monday that the government of new President, BJ Habibie, would release most political prisoners over the next three months.

This early gesture by Mr Habibie towards greater openness has been welcomed by human-rights campaigners, but they say all of the remaining people jailed for their peaceful opposition activities must also be freed.

Indonesia has nearly 200 political prisoners and 600 more under preventive detention.

Students have called for BJ Habibie to resign

Justice Minister Muladi ruled out freeing the East Timorese guerrilla leader Xanana Gusmao, who is serving 20 years.

He said the president made the amnesty decision in the "national interest particularly at a time of reform when the government is trying to improve its international image in the field of human rights."

The news of the releases came as scores of people held a demonstration outside Cipinang prison in the capital, Jakarta, demanding the immediate release of hundreds of political prisoners detained during the 32-year rule of former President Suharto.

The notorious top security prison opened its doors to both foreign and Indonesian media for about an hour on Sunday for the first time.

Soldiers blamed for shooting students

The head of the Indonesian armed forces, General Wiranto, says 14 soldiers are suspected of misconduct following an inquiry into the killing of six students during May's anti-government demonstrations.

They died when police opened fire on student protesters at Trisakti university.

General Wiranto blamed procedural mistakes and bad discipline for the killings, which sparked several days of rioting in the capital and other major cities.

He has not stated what action is to be taken against the eight soldiers and six officers suspected of involvement.