Crackdown was the term most frequently used last week to describe the extraordinary events that have turned Indonesia, rock-stable for decades and increasingly prosperous, into one of the edgiest countries in Asia. Just days after government troops forcibly seized the Jakarta headquarters of the Indonesian Democratic Party (or P.D.I., its Indonesian acronym), a takeover that led to at least two deaths and a lengthy day of rioting and looting, security forces started rounding up labor leaders and political activists. Among them was Muchtar Pakpahan, the country's most prominent trade-union leader, who was formally charged with subversion, a crime that carries the death penalty. As police swept the city, so did rumors, particularly on the topic of Megawati Sukarnoputri, 49, a P.D.I. leader who in little more than a month has been transformed from meek parliamentarian into the main political opponent of durable President Suharto--a change that may alter Indonesian politics forever.

But crackdowns can produce more than fractured skulls and broken spirits. Iwan, an intense, well-educated 22-year-old, is a member of the People's Democratic Party (P.R.D.), a group branded by the government last week as a communist organization. Iwan quickly decided to go underground to avoid detention, but before he disappeared, he agreed to be interviewed by TIME to clarify several points. The P.R.D. is not communist, he insisted, but it does intend to foment a pro-democracy movement across the archipelago. Megawati and the government's treatment of her, he said, have produced the necessary spark among the populace. "If we lose this momentum," Iwan intoned gravely, "it will not come again." With that, he headed into the traffic-clogged streets of Jakarta for an indefinite period of life on the run. "We must disperse," he said. "See you in two years."

In two years, the current five-year term of President Suharto expires and a new President must be elected. In the past, Indonesian presidential elections have not been hard to predict: Suharto, 31 years in office, has mastered all the levers of power, showing special skill in his control of the military, the country's most powerful institution. He has also commanded the respect and even affection of millions of his countrymen on the most remote islands of the 5,000-km-wide archipelago. But almost overnight, the predictable odds for 1998, for the parliamentary elections due in 1997 and for just about everything in Indonesian politics have been turned on their head. In April Suharto's wife of 49 years, Siti Hartinah, died unexpectedly, leaving the President bereft. Two months later, Suharto flew to Germany for a medical checkup at a heart center. Officially he suffers from a kidney stone, but speculation is rife about more serious health problems. In a matter of five weeks, Megawati has become a full-blown opposition figure, the very first in the Suharto era. Whether she likes it or not--and no one is certain how she feels or what she intends--Megawati has become a rallying symbol for discontented citizens such as Iwan, who want an end to one-man, military-backed rule.

The size of those ranks is anyone's guess, and neither Megawati's P.D.I. nor the more confrontational P.R.D. was considered much of a force until now. But in the newly inflamed political climate, analysts are revising their evaluations. Some say the P.R.D., with support from students and labor leaders, could be the greatest long-term threat to the Suharto regime. Proclaims Bintang Pamungkas, who admits to having worked closely with P.R.D. leader Budiman Sujadmiko: "These will be the final years for Suharto."

That will depend on whether the President is indeed ill or otherwise off his traditionally exquisite balance--and many see proof of the latter in the government's messy handling of the Megawati affair. But even if Suharto is winding down his presidency, democracy is not necessarily on the way in. The 75-year-old strongman could cede power to another hard-liner from the military, or even to one of his six grown children. Vice President Tri Sutrisono is Suharto's constitutional successor, but army Chief of Staff Hartono is seen to have the support of provincial commanders nationwide, while Minister for National Development Planning Ginandjar Kartasasmita, another former General, is regarded as a capable economic manager. As for Suharto's children, the likeliest candidate is his eldest daughter Siti Hardiyanti Rukmana, who chairs a key committee of the ruling Golkar party.

Almost no one in the capital is predicting an Indonesian version of the People Power revolution that ousted Philippine President Ferdinand Marcos a decade ago. Unlike Manila in 1986, Jakarta has a middle class that grows more prosperous by the day and has no desire for wholesale political turmoil. Suharto has a firmer lock on the military than Marcos had. If Indonesia is to be compared with Marcos' Philippines--and it often is, thanks to Suharto's custom of favoring family and friends with commercial monopolies--a better time frame would be 1983, when Filipinos started loudly questioning one-man rule following the assassination of Benigno Aquino Jr. Marcos was forced into political concessions that emboldened his opposition and led to the "snap election" of 1986, his Waterloo. If Suharto's boat is to be rocked, many see it happening in the run-up to the 1998 presidential poll, with strenuous maneuvering by all parties: the military, the presidential palace and the opposition. "As for People Power, it's not there yet," says a filmmaker in Jakarta. "There is no charismatic leader on the scene to replace Suharto."

But the frustrations are there. A young advertising executive speaks for many middle-class Indonesians: "We want this country to be on a par with our neighbors in terms of rights. We are achievers, and we would like to compete freely within our system. We would like to be promoted based on merit, not connections. At the moment, there is not enough space within the Indonesian political system for us to express ourselves. We are suffocating here, and we can't stand the military."

Political ferment, unknown in Indonesia since the 1960s, promises many imponderables for the world's fourth most populous country (pop. 194 million). The economy grew 8% last year and is expected to keep growing, but there are virtually no outlets for popular discontent. Indonesia's press is tightly controlled. Gatherings of more than five people to discuss political issues are illegal. Only three political parties are sanctioned to contest elections, and they are forbidden to communicate with the masses except during a 45-day campaign period every five years. There are myriad other restrictions in a political system designed for no particular function but to perpetuate the authoritarian rule while resembling a democracy. If Megawati has turned up the steam to a dangerous level, a major irony is that she did it by accepting the system's restraints--and succeeded too well for the comfort of the President.

Megawati has one of the few politically charged names in Indonesia: she is the daughter of the late, charismatic Sukarno, the country's first President, who was overthrown in the 1965 coup that later brought Suharto to power. After two decades as a housewife, she entered politics in 1987 by winning one of the 1,000 seats in the National Assembly, where 75 of the places are reserved for the military and only 40% of members are elected. Five years later, she was elected chairwoman of the P.D.I., one of the country's three legal parties (the others are the Islam-oriented United Development Party and the ruling Golkar). That position made her eligible to run for President in 1998. She never formally said she would, but she did announce a platform that included presidential-term limits and a dismantling of the vast business empires of Suharto's six children.

These were pledges guaranteed to unsettle the palace, and in June the government helped organize a meeting of 300 members of her party in the Sumatran city of Medan, where they obediently voted to oust Megawati as P.D.I. chairwoman. She refused to acknowledge the result, and her supporters installed themselves in the party's Jakarta headquarters. Soldiers quickly surrounded the building, but the government was restrained from immediate action because the annual summit of ASEAN foreign ministers was taking place in the capital.

That piece of timing was heaven-sent for the anti-Suharto activists, and in particular the P.R.D. The latter group was organized in 1994 as part of a broader movement, which in the past two months has illegally launched two political parties. Its main activities to date have been labor agitations and efforts to figure out ways of advancing democracy through the tightly controlled parliamentary and presidential election systems. After the government had Megawati evicted from her party chairmanship, the P.R.D. found a popular cause and swung to her defense. During the four-week siege at P.D.I. headquarters, the P.R.D. joined the newly formed Free Speech Movement on an outdoor stage in the P.D.I.'s front yard. It became the most outspoken forum in Indonesia for decades. Poets, Islamic scholars, feminists, environmentalists and critics of all descriptions took turns venting their pent-up frustration and rage before ever larger crowds that spilled off the sidewalks and blocked traffic every day for more than a month.

It all ended on the morning of July 27: riot police stormed the P.D.I. headquarters, rained blows on Megawati's supporters with riot sticks and hauled scores into waiting police vans. Later that afternoon, crowds of protesting youths took to the streets in two neighborhoods of Jakarta. They looted shops and set fire to banks and government buildings. The day's violence claimed at least two lives and injured 50. The government announced a total of 246 arrests.

The following day, armed soldiers patrolled the streets heralding a wider crackdown. As the week went on, police armed with shoot-on-sight orders rounded up labor activists and employees of nongovernmental organizations. Even Megawati received a summons to show up at police headquarters for questioning on Aug. 5, as did three other P.D.I. members of parliament. The government announced that the riots had been organized by the P.R.D., which it described as linked to remnants of the Indonesian Communist Party. A chart was drawn up for internal government distribution showing the tentacles of a conspiracy designed to destabilize Indonesia. At the apex of the organization chart was the New People's Army, the armed wing of the badly splintered and largely moribund Communist Party of the Philippines, which was identified as the source of training and support for the conspiracy. Groups that have received such help from the Philippine communists, according to the chart, are the P.R.D., Amnesty International and other nongovernmental organizations, as well as the Australian Labor Party.

It is a ludicrous document. Many of Jakarta's intellectuals scoffed at the government's resurrection of the communist bogey. "The only people who believe the communist threat nowadays," comments Goenawan Mohamad, a former editor of Tempo magazine, which was banned by the government in 1994, "are the Indonesian generals."

At the same time, analysts saw a well-defined government strategy. Megawati was not impugned by the document or in any government statements following the riots. The groups with grass-roots support, such as the P.R.D., were accused of communism by the government in order to portray them as threats to national stability, which many Indonesians take seriously following the terrifying tumult of the mid-1960s. If the government succeeds in driving a wedge between Megawati and the P.R.D., it will deprive the activists of a rallying cause, taking the steam out of its plans for strikes, demonstrations and a possible call for a mass boycott of the upcoming elections. Megawati, in turn, might be reluctant to squander her public clout by protesting a crackdown on the P.R.D., which has probably already begun. "The army is hunting now," says Ridarson Galingging, a lawyer at the Indonesian Legal Aid Foundation, which represents many political activists.

The crucial factor is how Megawati decides to exploit her new status as opposition leader, both in the weeks ahead and during election time. She spent most of last week closeted in her home at the edge of Jakarta, communicating through interviews with the international media and via press releases that rarely appeared in the local papers. She was visited by Abdurahman Wahid, leader of the 34 million-member Nahdlatul Ulama Muslim organization, who announced: "The most important thing is that I totally support Megawati in her struggle." Wahid added, though, that he would never command his members to take to the streets. Amien Rais, chairman of the 20 million-strong Muhammadiyah, the country's second largest Islamic organization (four out of five Indonesians are Muslims), said he was neither for Megawati nor against her, but he warned that the country had deep social and economic divisions the government could not ignore much longer. Said he: "I hope the Suharto regime can take a moral lesson from this unrest."

That is heavy pressure of a kind the President is unused to. Some analysts say a compromise between Megawati and the new party chief to unite the divided P.D.I. and allow it to participate in the 1997 Assembly elections may be possible, although that is the sort of political risk Suharto has never taken. The President may have badly underestimated popular discontent with his rule, but there are no signs he is willing to part with it. Still, who would have predicted that thousands of Indonesians would be taking to the streets, risking arrest and even death, to express their frustration with the country's frozen, military-dominated political system? "This is a fast-changing situation," Megawati told TIME. "You should watch it very closely." That advice is hardly necessary for an Indonesia that has become very nervous, very fast.

--Reported by Sandra Burton, John Colmey and Michael Shari/Jakarta