Indonesia's President B.J. Habibie gave his first timetable for economic recovery Saturday, predicting a turnaround within a year or two despite the economy's stunning meltdown.

In an interview with The Associated Press, he also ruled out the possibility of independence for disputed East Timor. But he later indicated he was considering the release of East Timorese rebel leader Xanano Gusmao, Indonesia's highest-profile political prisoner.Habibie said pulling the country out of its worst economic troubles in decades demands "concentrated and concerted action" by all Indonesians.

"If it depended (only) on me, I would want do it immediately," he said. "We could come out of this crisis, let's say, with the help of everybody, in one to two years."

Habibie had not indicated how long economic recovery would take since he came to power last month. His predecessor, Suharto, quit amid protests and riots partly triggered by the economic woes.

Analysts have given a far more pessimistic view, suggesting it could be several years before Indonesia's economy picks up. Indonesia, thriving a year ago, has been hit hardest by Asia's financial woes.

The currency, the rupiah, has lost more than 80 percent of its value against the dollar since July 1997. Inflation is running at more than 50 percent and is rising along with widespread unemployment.

Weeks of political turmoil derailed a $43 billion bailout by the International Monetary Fund, which is examining how to restart the rescue plan.

Habibie has promised sweeping political changes to match IMF-demanded economic reform, including free and fair elections in 1999.

However, he has refused to budge on the issue of East Timor, a former Portuguese colony invaded by Indonesia on Suharto's orders in 1975 and annexed the following year.

"We are going to keep East Timor what it is, an integrated part of Indonesia," Habibie said.

Gusmao's release is a key demand of protesters and rebels who continue to fight for independence from East Timor's rugged interior.

"I'm really, really honestly considering releasing him and integrating all the Timorese, who are still in the mountains, (into) the society and to take care of them the same as other Indonesian people," Japan's Kyodo News agency quoted Habibie as saying Saturday.

Until now Indonesian authorities have flatly rejected calls to release Gusmao.

Earlier last week, Habibie released 15 East Timorese political prisoners and suggested a special status for the territory in return for peace - an offer rejected by East Timorese activists.

In East Timor on Saturday, about 1,000 protesters staged a noisy demonstration calling for a referendum on their future and Gusmao's release.

Habibie also said he remained friends with Suharto. Although the two have known each other for 49 years, Habibie indicated he will not help the ex-autocrat fend off corruption allegations if they are pursued legally.