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JAKARTA (Reuters) - Indonesia's government said on Monday it would protect a strip of peatland in Aceh province at the centre of an international storm over palm oil development, in a case that had become a test of the country's commitment to halt deforestation.

Indonesia imposed a two-year moratorium on clearing forest last May under a $1 billion climate deal with Norway aimed at reducing emissions from deforestation, but the former governor of the country's westernmost Aceh province breached the ban by issuing a permit to a palm oil firm to develop the peatland.

This prompted legal action from environmental groups and probes by the police and several government bodies.

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