Indonesia acknowledges al-Qaida threat

Indonesia’s government, reeling from a bomb attack that killed at least 180 people, acknowledged for the first time that al-Qaida is active on its soil - setting the stage for a possible crackdown on extremists.

Australian foreign minister Alexander Downer stressed today the need for an international investigation into the attack.

"We’re working very closely with Indonesia at the moment and it is very important we both hold exactly the same view about terrorism," said Mr Downer, who arrived in Bali late yesterday.

"Indonesians were killed, Australians were killed and other nationalities were killed and we should work together," he said after meeting Amien Rais, the speaker of Indonesia’s top legislature, in a Bali hotel. "We are happy with the cooperation so far."

Stocks have plummeted in the capital, Jakarta, since the attack and the Indonesian currency has slumped while tourists have fled the country, already one of the region’s most fragile economies.

The car bomb Saturday at a nightclub packed with foreigner tourists - mostly Australians - on the resort island may do more than just harm the economy and tourism. It may alter Indonesia’s approach toward extremism.

Since the September 11 attacks, and despite US pressure and the discovery of an al-Qaida-linked terror network in neighbouring Singapore and Malaysia, Indonesia has insisted there is no threat of violent extremism on its soil.

A turnaround came yesterday after a Cabinet meeting in Jakarta when defence minister Matori Abdul Djalil said: "We are sure al-Qaida is here.

"The Bali bomb blast is linked to al-Qaida with the cooperation of local terrorists," he said.

President Megawati Sukarnoputri is likely to face growing demands to arrest high-profile suspects whose continued freedom has astounded law enforcement officials in other countries. Whether she can do so without provoking extremists - and possible further attacks - is an open question.

Security minister Bambang Susilo Yudoyono said there were signs terrorists were planning attacks against industrial sites, including ExxonMobil’s Arun liquefied natural gas plant in Aceh and the Caltex refinery in Sumatra.

"We will increase the security alert in those areas," Yudoyono said.

On Bali, there was no visible evidence of a higher security presence or stricter controls at the airport, though police insisted an elite unit had been deployed.

US and Australian detectives joined the hunt for the killers. Investigators from Scotland Yard were on the way, and Germany said it might send experts.

Bali police said 27 witnesses had been questioned.

"We are intensively investigating the case, with officers combing the scene and Denpasar. That’s all we can say at the moment," Lieutenant Colonel Yatim Suyatmo, a police spokesman, said today.

Suspicion has fallen on Jemaah Islamiyah, a group that Singapore says is based in Indonesia and is linked to Osama bin Laden’s terror network. But the group’s leader denied involvement.

"All the allegations against me are groundless. I challenge them to prove anything," Abu Bakar Bashir said. "I suspect that the bombing was engineered by the United States and its allies to justify allegations that Indonesia is a base for terrorists."

Indonesia has refused to arrest Bashir, saying he has committed no crimes.

Foreign countries compiled rising tolls of their citizens killed in the bombings while volunteers at a hospital-turned-morgue piled ice on bodies and loaded others into refrigerated containers to slow decomposition in the tropical heat.

A pair of explosions, one from a car bomb, tore through a maze of bars, restaurants and night-clubs on Saturday night at Kuta Beach, a haunt for surfers and young vacationers. The open-air Sari Club was turned into an inferno. Little remained of it Monday except a huge hole.

Government officials said 181 people died, although hospital workers put the total at 190. More than 300 people were injured.

Hundreds of wounded Australians were flown home yesterday but two died en route.

Balinese officils said that only 39 positive identifications had been made - 15 Australians, eight Britons, five Singaporeans, six Indonesians, one German, one French citizen, one Dutch citizen, one New Zealander and one Ecuadorian.

Two Americans were killed and four injured, the US State Department said. In London, the British government said that at least 30 Britons died. Switzerland believed two of its citizens were among the dead.

Bali’s international airport was filled with stunned tourists desperately looking for flights home.

But planes also brought people to Bali, including relatives coming to console heartbroken family members and friends and to join the agonising wait for missing loved ones to be identified.

"It’s been hell," said David Byron, an Australian. His 14-year-old daughter, Chloe, was with schoolmates when the Sari Club exploded in flames. "But I’m taking her home. I don’t care what is left."

The normally crowded beaches were largely empty yesterday. At sunset, about 300 people, mostly long-time foreign residents, gathered on the beach for a religious ceremony, joined their hands in a circle and prayed.