The incident occurred at the parliament building where students have rallied all week demanding reforms and a change of government. After the resignation of President Suharto on Thursday, they began to call for the head of his successor and former vice-president, BJ Habibie. "Habibie will be the second great disaster", read a giant banner drapped across the main parliament building.
The banner was a target for some 5,000 Habibie supporters who burst into the parliamentary compound early yesterday, shouting "God is Great" in Arabic and rhythmically chanting Mr Habibie's name. After the crowd burst into the square where the students were peacefully listening to speeches,there was a dangerous standoff which threatened to develop into a violent confrontation as the Muslim protestors tore down banners criticising the new president.
Student leaders pleaded with their followers not to be provoked. "We are one commando", they shouted in response to the Muslim chants; they like to describe themselves as a united commando group, fighting to bring democracy to Indonesia.
The Muslims claimed to be students but many of them were clearly not from college. Leaders denied they had been mobilised by Mr Habibie, but admitted he knew about the demonstration in advance.
It appeared some careful organisation had gone into the protest because the demonstrators came with professionally printed banners and head bands which helped to distinguish them from the students.
The restraint of the students defused the situation, though a second group of Muslim protestors arrived after the first had left. This smaller group were seperated from the students by soldiers who had not intervened when the first group arrived.
For much of 32 years in power Suharto was able to balance the interests of the Muslim majority, who make up 90 per cent of Indonesia's population, with those of minority races and religions. Athough he is a practising Muslim, Suharto's style of leadership owed as much to that of the traditional Javanese kings, as to the precepts of Islam. It was only very late in life, for instance, that he made the pilgrimage to Mecca. Mr Habibie, however, is seen as a much more committed Muslim, and yesterday's incident suggests he may yet become a focus of fundamentalist agitation.
"For 30 years Muslims had nothing under the New Order, and all the money went to Chinese and Christians," said Darwin Agus, of the Islamic Youth of Indonesia, one of the groups demonstrating in the new President's support. "Habibie is a good start in preparing for the next step, government by the Koran."
The naming of a new cabinet has done little to increase confidence in Mr Habibie whom many in Jakarta see as an interim leader filling the gap between Suharto and a likely successor drawn from the ranks of the military.
The two most blatant examples of favouritism from Suharto's last cabinet have been sacked: the fallen president's eldest daughter, Siti Hardijanti Rukmana, who was in charge of welfare, and Bob Hasan, his golfing partner and trade minister. But half of the new cabinet is made up of old ministers.
"I am neither endorsing nor opposing the cabinet," said Amien Rais, the country's Muslim opposition leader. "The cabinet has a lot of technocrats in it but some of the names still reflect old ways."
General Wiranto, chief of the armed forces and one of the most powerful candidates to succeed Mr Habibie, stayed on as defence minister. Yesterday, in a statement that can now be seen as an oblique warning about the events that were to take place last night, he said student demonstrations would not be tolerated indefinitely. "I expect the students to end their mass actions and go back to their campuses to study," he said.