Young men paraded the severed head impaled on a bamboo stake in a convoy around the town of Malang in East Java last week. Amid the jubilant shouting, it silently dripped blood onto a young vigilante's shirt. Others mercilessly dragged the headless body along the street behind their motorbikes.

He was a 'ninja', the men shouted as horrified pedestrians looked on. They were referring to one of the mysterious killers held responsible for the deaths of over a hundred Islamic figures in East Java in recent weeks. Police said they had no idea who the hapless victim was.

The rural, deeply religious eastern end of Indonesia's main island of Java is in the grip of a wave of hysteria following the news in late September that apparently organised killers were targeting black magicians. Such magicians are much feared for their powerful spells.

What turned the story into an explosive national issue, however, was the revelation that several prominent 'straight' Islamic teachers had died as well. Groups of toughs, later called 'ninjas', at times arriving in trucks before dawn from outside the village, kidnapped and killed them one by one.

In the absence of hard data, conspiracy theories began to fill the pages of every daily newspaper in the country. Everybody pointed to their favourite enemy as the culprit.

The military were first off the mark. It must be the communists, they said. When Suharto rose to power in 1965-66, the military had worked with Islamic leaders to murder hundreds of thousands of alleged communists. The suggestion was that with Suharto gone, relatives of dead communists saw their chance to wreak revenge.

Islamic leaders, on the contrary, pointed the finger at rivals within the religious community. Abdurrahman Wahid, head of the organisation Nahdatul Ulama that lost many members in the recent East Java murders, hinted at adversaries within Muhammadiyah, which has supplied several key ministers in President Habibie's cabinet.

Secular democracy activists long opposed to the military seized on the alleged involvement of soldiers.

East Java is one of Indonesia's most volatile provinces. Murders against black magicians take place regularly. During the democratic 1950s, political polarisation between Islamic and secular parties was sharp. The killings at the beginning of the Suharto era were the most vicious there. Today, visiting journalists speak of a civil war atmosphere. Vigilante squads in the countryside stop all vehicles every few hundred metres, looking for 'ninjas'.

Ahead of Indonesia's crucial elections next May, the first democratic ones in 44 years, some are asking: 'Is Indonesia too violent to be democratic?'. It is a serious question that cannot be lightly dismissed.

Some answer 'Yes'. Among them are those who today think fondly of Suharto's New Order. Ever since Dutch colonial times, conservative elites have seen nothing but chaos arising out of the impoverished masses.

One Dutch governor-general said in the early 1800s: 'No one believes more firmly than I do in a liberal policy adapted to their character and institutions, but to apply to an ignorant and idle people the liberal institutions of an enlightened age is as impossible as to introduce religious toleration among blind fanatics'.

Minus the professed belief in liberalism, it could have been said by Suharto. It is still the underlying assumption of foreign diplomats and journalists for whom the most important question today is whether the army can hold Indonesia together.

The trouble is, those who idealise the Suharto era almost always overlook the violence conducted by the state itself. Suharto left mass graves scattered from Aceh to East Timor, also in East Java.

Paradoxically, the central importance his regime gave to security required periodic demonstrations of insecurity to justify its permanent emergency rule.

Historians have long known of the calculated way Suharto's military officers encouraged the xenophobic hysteria that resulted in the slaughter of 1965-66. This year, several western press accounts have implicated the military in provoking the May 13-14 riots in Jakarta that left over a thousand dead.

Senior military officers are on record as saying that throughout the Suharto era they constantly fanned Islamic fears of communism 'to keep society vigilant'. As a cheap alternative to proper law enforcement, in other words, they chose to create a permanent atmosphere of brooding violence. Like Joseph R McCarthy in the USA, like Radovan Karadzic in Bosnia, like Jean Kambanda in Rwanda, Suharto needed the demons within society.

These are among the reasons that, despite the awful recent violence in East Java, many others are saying: 'No, Indonesia is not too violent to be democratic'. Instead, they believe Indonesia has had violence thrust upon it by its leaders. They hope democracy will deliver the country from them.

Many look to Abdurrahman Wahid as the best spokesperson for a tolerant, democratic society. Perhaps he is too ready to swallow conspiracy theories that just happen to involve his old foes. But he could be generally right when he claims there are forces behind the violence that prefer the Suharto-era status quo to a democratic Indonesia.

In the next few months, the stakes in Indonesia are high indeed. If the elections are conducted honestly, they could result in a new Indonesia. One in which the president is effectively beholden to parliament, and in which the armed forces take a back seat. One in which the entire elite that has run Indonesia for over three decades will be sidelined, along with their tainted methods. Many are seeing the violence in East Java in the light of these stakes.

Gerry van Klinken, editor, 'Inside Indonesia' magazine.