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.