Indonesia, terror's latest front

Most of the victims of Saturday's bombing in Bali – the deadliest terrorist attack since Sept. 11 – were Australian.

But the blast that wounded 300 and took the lives of at least 189 people – including tourists from the US, Germany, Britain, France, Ecuador, the Netherlands, and Sweden – is reverberating worldwide, revitalizing official support for the war against terrorists.

Now a critical question hangs over the world's largest Muslim nation: Will Indonesia's President Megawati Sukarnoputri take swift, decisive action against radical groups in her country?

In a week that saw Pakistan's hardline Muslim political parties make unexpectedly large gains in elections, Indonesia also now finds itself on the frontlines of a difficult counter-terrorism war – and roundly condemned for footdragging. "You have to hope that she's finally going to meet this problem head on,'' says one Southeast Asian diplomat. "They can't deny they have a problem anymore, and the nation that's going to suffer the most is Indonesia."

Voicing a view seen in capitals worldwide Monday, Japan's leading newspaper Yomuiri wrote: "Indonesia should not be the weak link in the global campaign against terrorism." Japan is Indonesia's biggest aid donor.

The timing of the Bali bombing may indicate its origins. It occurred on the second anniversary of the Al Qaeda-linked attack against the USS Cole in Yemen, and within a week of a suspected bombing of a French oil tanker near Yemen and another attack that killed a US Marine in Kuwait.

"There are groups that have been given ideological direction and training by Al Qaeda, but can take the operational controls for themselves," says terrorism expert Rohan Gunaratna, author of the book "Inside Al Qaeda."

Analysts say it is not clear whether these attacks are all coordinated by Al Qaeda, or being carried out independently by militants with a shared ideology.

Either way, the fear of more terrorist attacks on tourist and oil production sites in Southeast Asia was seen most immediately in the stock markets of the region. In Indonesia, the market tumbled 9 percent, with stocks in Thailand, Malaysia, and the Philippines also sinking. Major markets in Hong Kong and Tokyo were closed for holidays.

As tourists fled Bali Monday, US diplomats in Indonesia were ordered to send their families home and governments worldwide warned citizens against traveling to Indonesia.

The nightclub attack – which coincided with two smaller, less damaging blasts Saturday in front of the home of the US honorary consul on Bali and another nightclub – was the worst terror attack in Indonesia's history.

Though the Indonesian police said they had no early leads, Monday Indonesia's defense minister said "I'm convinced that there is a domestic link to Al Qaeda." Immediate suspicion fell on the Jemaah Islamiyah (JI), an Indonesian-led regional terror group with ties to Al Qaeda that the US and its allies have said Indonesia is failing to contain.

"There is no other terrorist organization in Indonesia, other than the JI, that has the ability to carry out this sort of attack,'' says Mr. Gunaratna.

US embassies in Malaysia and Indonesia were closed around the Sept. 11 anniversary because US intelligence indicated the JI was planning car-bomb attacks on US targets. The Singapore government says the group was behind a failed plan to use truck bombs against the US embassy here late last year, and the Philippines says the group was behind a car bomb attack on its ambassadors house in Jakarta two years ago, among other bombings.

But Indonesia has been reluctant to act against the group and its alleged leader, Abu Bakar Bashir, an Indonesian preacher who lives openly in Central Java. He said at a Sunday press conference that he had nothing to do with the bombing. "I think this explosion was engineered by the United States ... because they always claim that Indonesia has a terrorist network."

Advisers to Mrs. Megawati say Mr. Bashir has remained free so far because she fears an Islamic backlash against her government if she moves against the preacher, who has gained in stature with each accusation made by the US. America is unpopular in Indonesia because of its threats to go to war with Iraq and because of the war in Afghanistan.

Megawati, a secular nationalist, is viewed with suspicion by Indonesia's Muslim activists, and she and her advisers have feared taking action because it might leave her vulnerable to politicians like Hamzah Haz, her Vice President and the leader of the largest Muslim party in parliament.

Mr. Haz has in the past defended Mr. Bashir. After a cabinet meeting today he reiterated his stance "that Mr. Bashir has never been involved in terrorism." Asked who he thought had led the attack, he echoed Mr. Bashir by saying he thought it was politically "engineered," though he didn't say by whom.

But in recent months, Mr. Haz's terrorism denial has become an increasingly isolated position in the Indonesian cabinet, with intelligence chief Hendropriyono and Armed Forces Chief Endriartono Sutarto arguing for a tougher line.

Some observers said this might be an opportunity for Megawati to paint the Islamic political opposition as extremist and gain the support she needs to arrest those involved.

The Sari Club was a Kuta institution, a cheap beer-soaked hangout with the flags of 40 nation's hanging out front where young backpackers and surfers packed the dance floors every weekend. Intelligence analysts say that it's overwhelmingly Western clientele was not a coincidence: The bar has a foreigners-only policy.

Late last year Malaysia and Singapore arrested dozens of alleged militants with ties to the Indonesian network, and the Philippines has also jailed a handful of alleged members of the Jemaah Islamiyah.

Security officials in all three nations say they have provided Indonesia with transcripts of interrogations and other evidence that have shown terrorists are at work there, but little action has been taken.

The mostly Catholic Philippines has been a particular target of militant Muslim violence because of a civil war with Muslim insurgents on the southern island of Mindanao for the past 20 years. On Saturday, a small bomb blew up outside of the Philippines consulate in the northeastern Indonesian city of Manado, on Sulawesi island.

There are other serious problems for Indonesia's international relations. Australia is one of Indonesia's most important trading partners, and the two country's relationship was just getting over a rocky patch created by Australia's support for East Timorese independence.

Australian Prime Minister John Howard told a Sydney radio station on Monday: "We have a right, and I have a duty, to push upon and press upon the Indonesian government the need for a cooperative effort [against terrorism] in the region." Mr. Howard said the Australian Justice and Foreign Ministers would be flying to Jakarta this week to work on cooperative efforts with Indonesia to catch the killers.

• Material from the wire services was used in this report.