By Muklis Ali and Telly Nathalia

JAKARTA, May 21 (Reuters) - Indonesia's president called for calm on Wednesday as thousands marched over rising prices on the 10th anniversary of the downfall of former President Suharto, and some protesters threw rocks and bottles at police.

About 2,000 people marched on the presidential palace in Jakarta, and there were similar rallies in Medan in North Sumatra and in the country's second-largest city of Surabaya in East Java.

Police said they detained at least 27 people in Jakarta after some demonstrators at the rally, which included students, farmers and workers, threw rocks, bottles and at least one petrol bomb at police.

"I'm listening to issues the students are voicing as part of the unfinished reform agenda," President Susilo Bambang Yudhoyono told reporters.

"Demonstrations are normal in a democracy, as long as they are orderly, because if anarchic, they will only add to problems," he added.

Anger has grown since the government confirmed plans last week to lift prices of heavily subsidised fuel by up to 30 percent, although it has vowed to cushion the impact on the poor through cash handouts.

Some protesters carried slogans saying: "SBY-JK must step down", referring to the initials of President Yudhoyono and Vice President Jusuf Kalla.

Lines of police carrying riot shields blocked the crowds in front of the white colonial-style presidential palace.

"Ten years ago our brothers, our teachers, fought for reform. But now, let's admit it, democracy is almost dead," a student, who only gave his name as Gilang, told the flag-carrying crowd.

There has been a series of demonstrations in the last few weeks since the fuel price issue became prominent, although they have been mainly small scale and relatively peaceful.

Price hikes are a sensitive issue in Indonesia, where millions live on less than $2 a day and have had to cope with rising prices of rice, cooking oil and now fuel.

President Yudhoyono's predecessor, Megawati Sukarnoputri, was forced to roll back a decision to lift fuel prices after massive demonstrations. A big fuel price increase also led to the rioting that helped topple former president Suharto on May 21, 1998.

Yudhoyono, who previously pushed through fuel price rises in 2005 with only limited protests, had been reluctant to set more rises with presidential and parliamentary elections next year.

But with Indonesians enjoying some of the lowest fuel prices in Asia, the government decided to bite the bullet and raise prices to contain an expanding budget deficit fanned by rising global oil prices.

($1=9300 Rupiah) (Writing by Olivia Rondonuwu, Editing by Ed Davies and Valerie Lee)

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