Indonesian Vice President Jusuf Kalla said he was pleased with the progress of talks with Acehnese rebel leaders in Finland, which ended on Wednesday.
Both sides have expressed optimism at the talks' progress
"The result is much better than in previous meetings," Mr Kalla said.
But analysts say there is still much for the two sides to discuss if they are to end nearly 30-years of separatist conflict in Aceh.
A key factor influencing the success of the discussions will be an agreement on the definition of "self-rule".
The rebel Free Aceh Movement (Gam) introduced the term at the Helsinki meeting, because it was not "an offensive term" to either side, according to spokesman Bakhtiar Abdullah.
In the past, Gam has said it would accept nothing less than total independence - while Jakarta has always ruled that out, preferring to talk instead of "special autonomy".
Mr Abdullah told the BBC that the term "self-rule" had been introduced "in order to move forward".
But he conceded that it "was yet to be decided what it will actually mean in practice", and that both sides would discuss their understanding of the concept before the talks reconvene for a third round in April.
Jusuf Kalla also discussed the term with reporters on Thursday.
"Self-rule actually is a stronger form of autonomy. We have not agreed to it yet," he told Reuters news agency.
"The government will govern, not Gam. Self-rule will not be by Gam, but by a democratic government."
Before the first round of talks in Helsinki three weeks ago, the two sides had not met formally for almost two years.
But in the wake of the December tsunami, which destroyed huge areas of Aceh's coastline, both the government and Gam said they were keen to reach a deal.
During their second meeting in Finland, there were rumours that Gam had abandoned its quest for independence.
Mr Abdullah said the subject was not mentioned in the talks. He said that Gam "never has and never will renounce its goal of fighting for independence".
But he added that "we never close doors on a possible negotiated settlement", and that "in all negotiations you have to put something on the table."
Mr Abdullah said he was cautiously optimistic for a peaceful solution, a comment echoed by both the Indonesian Information Minister Sofyan Djalil and the Finnish mediator for the talks, Martti Ahtisaari.
"We still have differences, but at least we are starting to talk substance," Mr Djalil said on Wednesday.
But there was also a realisation that much more needed to be done.
"You can't solve a conflict of 30 years in one or two rounds of talks," Mr Abdullah said.
Martti Ahtisaari added that: "Nothing is agreed until everything is agreed".
He said that all main issues would remain on the table in the 12 April talks.
These include the proposed special autonomy package, amnesty for Gam members, security provision, international monitoring and the timetable for action.