The hunt for the bombers of a Bali nightclub is reportedly focusing on a group of foreigners who arrived in Indonesia two days before the blast.
The suspected terrorist cell, which entered Indonesia through the city of Semarang, about 250 miles east of Jakarta, was led by a Yemeni and a Malaysian, the Jakarta Postdaily reported. The paper says the group may have included at least one European.
Police in Bali say they have detained two Indonesian men for further questioning after initial interrogation. They are a security guard and the brother of a man whose ID card was found at the bomb scene.
Security Minister Mr Susilo Bambang Yudhoyono said the alleged Indonesian leader of Jemaah Islamiyah, a regional Muslim militant group also suspected in the attack, could face legal action.
The comment came just a day after Mr Yudhoyono denied that Jemaah Islamiyah existed in Indonesia.
Government officials have long tried to balance a crackdown on local militants against fears that aggressive moves could spark a backlash by the extremists.
The officials have resisted demands by neighbouring governments to take action against the Indonesian who has been identified as the spiritual head of Jemaah Islamiyah, Abu Bakar Bashir, but Mr Yudhoyono indicated that authorities may move against him.
AP