A group suspected of carrying out the Bali bombing is believed to have linkswith al-Qaeda, writes Miriam Donohoe, Asia Correspondent.
The idyllic holiday Island of Bali, with its luxury resorts and sandy white beaches, has until now escaped the religious and political violence that periodically erupts across predominantly Muslim Indonesia.
All of that ended on Saturday with the detonating of a bomb that killed at least 182 people and injured hundreds more on the mainly Hindu island.
Indonesia has long been considered a weak link in the US-led war on terrorism and the Megawati-led government has been accused time and time again of failing to crack down on radical Muslim groups.
Recent events in the region point to a resurgence of terrorist activity and to the fact that Osama bin Laden's al-Qaeda network is still active more than a year after the September 11th attacks.
There have been consistent reports of al-Qaeda cells popping up in South-East Asia. One such group is blamed for a planned attack on Singapore that was thwarted last December.
Last week an explosion ripped through a French supertanker off Yemen, a US Marine was killed and another wounded in Kuwait, a US soldier was killed in a bomb blast in the Philippines and a grenade was discovered outside the US Embassy in Jakarta.
Was the weekend bomb attack the work of a local group, fighting to create a pan-Islamic state stretching across the South-East Asia?
Or, given that so many young Westerners were the targets, was it the work of al-Qaeda operatives? Or was it a combination of both?
One of the prime suspects behind the bombing is the Jemaah Islamiyah (JI) group, a shadowy organisation that has allegedly been trying to topple governments in South-East Asia and to carve out an Islamic state.
JI is believed to have links to al-Qaeda and is accused of plotting to bomb US targets in Singapore.
Dozens of suspected members have been arrested in Malaysia and Singapore, but none in Indonesia.
The group is led by Muslim cleric Abu Bakar Bashir, who only last week declared a public defence of Islam.
He lives openly in Indonesia, despite intense international pressure for his arrest. The Indonesian government says it has no evidence against him.
"Now it is up to the Indonesian government, police and people to also defend Islam, or to choose to defend America," he was quoted as saying in Jakarta.
The grey-bearded Bashir is chairman of the Indonesian Mujahidin Council, an umbrella organization advocating Islamic law in the sprawling archipelago.
He speaks regularly to the media and announced two weeks ago he was suing Time magazine for defamation after it carried an article linking him to terrorist activities. Warnings that JI was planning major terrorist attacks have come thick and fast recently, from countries including Malaysia, Singapore and Australia.
Less than a week ago, the Australian Foreign Minister, Mr Alexander Downer, said during a regional meeting in Malaysia: "The organisation that we are most concerned about is a group called Jemaah Islamiyah. We think Bashir is a significant figure in JI."
After yesterday's bomb attack, Mr Downer went further and said that JI has links to al-Qaeda and that "it's conceivable that an organisation like that could be behind this action."
Australia is one of Washington's staunchest supporters in the war launched against al-Qaeda following the September 11th terrorist attacks. While Bashir is a self-confessed admirer of Osama Bin Laden, he insists that JI does not exist and that he has no links to terrorism. However neighbouring Muslim state, Malaysia, says differently.
Two weeks ago the Malaysian police announced the arrest of a "prime" terror suspect, and said he was a member of the Malaysian Militant Group (KMM), which has links to JI.
The police claimed the suspect received instructions from Bashir and another Indonesian Islamic fundamentalist, Hambali, also known as Riduan Isamuddin.
Hambali is believed to be in the US and is described as being in charge of the JI in Malaysia and Singapore. He too is suspected of having direct links to al-Qaeda.
Singapore has accused JI of plotting attacks on several Western targets in the island nation, including the Australian embassy, and has arrested 32 alleged JI militants in the last year.
In June, the US took into custody an Arab, Omar al-Faruq, who was arrested in Indonesia on suspicion of being a senior al-Qaeda operative for the region.
According to Time magazine, al-Faruq has given statements to the CIA and has admitted under interrogation in US custody to being al-Qaeda's top representative in south-east Asia.
The article said al-Faruq had admitted links with Bashir and with Agus Dwikarna, an Indonesian Muslim activist currently jailed in the Philippines for possession of explosives.
Time claimed that Al-Faruq reportedly confessed to the US authorities that he used Indonesia as a base to plan attacks on US embassies across south-east Asia.
The magazine also quoted regional intelligence reports and a CIA document alleging that al-Faruq twice attempted to assassinate Indonesia's President Megawati Sukarnoputri, and that he carried out a string of church bombings in Indonesia that killed 18 people in 2000.
The US has issued repeated warnings in recent months over fears that Indonesia, the world's most populous Muslim nation, may be home to al-Qaeda sympathisers.
After months of official denials, senior Indonesian military officials late in September admitted that al-Qaeda might have a limited network in the country.
The Indonesian military revived its counter-terrorism unit and intelligence authorities sent a team to the US to interrogate al-Faruq. Indonesia has also invited the US to send a team to the country to investigate the possibility of al-Qaeda cells operating there.
Recently the US envoy to Jakarta, Ambassador Ralph Boyce, told Muslim leaders that al-Qaeda operatives were in Indonesia.
The concern now is that the Bali blasts may result in a spillover of violence to other parts of south-east Asia.
The Philippines, facing a Muslim insurgency in the south, is one country that will be on the alert following the bombs and yesterday it heightened security. Police were instructed to protect possible targets of acts of terrorism in case of copycat groups.
The Philippine President, Mrs Gloria Arroyo, will today preside over a meeting of her National Security Council on Monday to discuss the Bali bombings and tensions over Iraq.