Yes, I have heard that about the intent of this law. I have also heard that it's because they were getting angry about things such as Muslim schoolgirls not being able to participate in things like gym class because they would not take off their large headdresses. I'm not sure which one I believe because both explanations I have seen from people who are actually in the country.
If the intent is to prevent religious conflict, that's a pretty silly way of going about it. "Hi, you think you're religion is too important to hide just so you're not hated by some, so we're going to force you to hide it. It's for your own good. Really. It is."
Re: art's comment. Perhaps that's true, but that's something that - if it is to be better - must come naturally and without interference of some government forcing it upon people.