City (pop., 2000: 1,451,419) and river port, Indonesia. It is located on both banks of the Musi River. It was the capital of a Buddhist kingdom from the 7th to the 14th century AD and was subsequently overthrown by the Hindu Majapahit empire. The Dutch East India Company established a trading post there and in 1659 built a fort. Palembang was occupied by the Japanese during World War II and was the capital of South Sumatra until that state was included in the Republic of Indonesia in 1950. The port is accessible to ocean traffic and conducts considerable trade with ports on the Malay Peninsula and in Thailand and China.
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The city was once the capital of the ancient, Buddhist kingdom of Srivijaya that controlled a large part of what is now Malaysia and Indonesia. Following a 1025 raid by the Chola Empire (In the period of Emperor Rajendra Chola I) of southern India it began to gradually decline in importance. Srivijaya's capital eventually moved northward to Jambi. Palembang is also the origin of Parameswara, founder of the Malacca Sultanate.
Palembang's economy has been developed significantly since it became a host for a National Sporting Event in 2004. The city government has set a revenue target of IDR 3.5 billion from advertising alone.. Palembang is also one of hosts of the 2007 AFC Asian Cup.
This city is famous in Indonesia for its "Pempek" fish cakes.