Updated

A U.S.-trained former general who led the fight against terrorism in Indonesia was headed for a landslide victory in the Muslim country's first direct presidential elections, according to partial results Tuesday.

Susilo Bambang Yudhoyono (search), who focused his campaign on fixing the economy and cracking down on corruption, had 60 percent of the votes with nearly half counted early Tuesday. President Megawati Sukarnoputri (search) had 40 percent.

The results were in line with a survey by the Washington-based National Democratic Institute, the international arm of the Democratic Party. The group, which based its forecast on counts at selected voting stations, accurately predicted the outcome of Indonesia's parliamentary elections in April and of the first round of the election in July.

Yudhoyono declined to claim victory late Monday, while Megawati did not concede, saying she would wait until the official tally is announced Oct. 5. The new president will be sworn in Oct. 20.

Investors welcomed Yudhoyono's apparent victory. At midday, the Jakarta Stock Exchange Composite index was up 0.6 percent. The U.S. dollar fell 0.6 percent against the Indonesian rupiah.

The elections were largely free of violence and accusations of fraud, offering further evidence that democracy can prosper in the Muslim world, which is largely ruled by authoritarian regimes.

"It appears that we have the first peaceful transition of power in Indonesia's history," said Glyn Ford, head of a 224-member European Union election monitoring team. "Indonesia is ... the largest Muslim nation. It demonstrates that democracy is not culturally bound."

American officials also welcomed the peaceful election.

"We congratulate Indonesia on the conclusion of its historic elections," said Adam Ereli, deputy State Department spokesman. "These landmark elections set a strong example for the region and emerging democracies everywhere."

More than 68 million votes had been counted by midday Tuesday in the world's most populous Muslim nation. About 80 percent of the 153 million registered voters cast their ballot.

Yudhoyono will be the fourth head of state since widespread street protests over an economic slump forced an end to the 32-year dictatorship of former military leader Suharto in 1998.

While Yudhoyono appealed to Washington because of his hard line against terrorists in this strategically located nation that stretches under Southeast Asia from the Pacific to the Indian Ocean, most Indonesians were concerned about the economy and corruption.

The 55-year-old retired soldier said his priorities are building up an economy that is growing much slower than Indonesia's neighbors, attacking graft and providing jobs for the country's 210 million people.

But he also promised to crack down harder on Jemaah Islamiyah (search), a group with links to Al Qaeda that has been blamed for three bloody terror attacks — the Sept. 9 truck bombing outside the Australian Embassy, last year's bombing at the Marriott hotel in Jakarta and the 2002 bombings in a nightclub district on the resort island of Bali.

As security minister under Megawati, Yudhoyono oversaw a campaign that is thought to have dispersed Jemaah Islamiyah's members, forcing them to split up into smaller groups with less coordination.

"Yudhoyono is strong, caring. He is hard. He is best for Indonesia," said Marni, a 37-year-old housekeeper who like many Indonesians uses only one name.

Under Suharto, lawmakers — not voters — picked the head of state in a system the dictator abused to maintain his grip on power. Monday's vote was the first time Indonesians directly elected their leader.

"I am thankful to the Megawati government for establishing this kind of democracy," Yudhoyono said late Monday.