The assembly in Colombo voted to reduce some of the strictest provisions of the state of emergency, which has been extended monthly since 1983 to give sweeping powers to security forces.
Soldiers will now have reduced powers to carry out search operations, while the police will lose the right to ask for details of householders in any part of the island.
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The authorities previously required residents to register all overnight visitors at the nearest police station.
Parliament also reduced the period that a suspect can be held in custody without being produced before a magistrate from 18 months to three months, but many elements of the state of emergency law remain in place.
"There cannot be a wholesale lifting of the emergency. It will be done part by part," External Affairs Minister Gamini Lakshman Peiris told p