In Nov. 1946, a draft agreement on forming a Netherlands-Indonesian Union was reached, but differences in interpretation resulted in more fighting between Dutch and nationalist forces. Following a bitter war for independence, leaders on both sides agreed to terms of a union on Nov. 2, 1949. The transfer of sovereignty took place in Amsterdam on Dec. 27, 1949. In Feb. 1956, Indonesia abrogated the union and began seizing Dutch property in the islands.
In 1963, Netherlands New Guinea (the Dutch portion of the island of New Guinea) was transferred to Indonesia and renamed West Irian, which became Irian Jaya in 1973 and West Papua in 2000. Hatta and Sukarno, the cofathers of Indonesian independence, split over Sukarno's concept of “guided democracy,” and under Sukarno's rule the Indonesian Communist Party (PKI) steadily increased its influence.
Sukarno was named president for life in 1966. He enjoyed mass support for his policies, but a growing power struggle between the military and the PKI loomed over his government. After an attempted military coup was put down by army chief of staff, General Suharto, and officers loyal to him, Suharto's forces killed hundreds of thousands of suspected Communists in a massive purge aimed at undermining Sukarno's rule.