'We have always had terrorists in Indonesia. But in the past, their deeds have mostly related to domestic issues, and there is no evidence yet to link Bali to the outside world,' said scholar and Asean expert Dewi Fortuna Anwar.

'One should not ignore the possibility of the involvement of the [Indonesian] security forces in the bombings, we cannot dismiss the possibility that we are dealing with the enemy within.

'This could be state terrorism or non-state terrorism,' said Dr Anwar, a foreign policy adviser to former president Bacharuddin Habibie, and author of the book Indonesia in Asean - Foreign Policy and Regionalism.

Other analysts said that the bombings failed to fit the al-Qaeda pattern of attacking symbols of US power, and could be a revenge attack by embittered Indonesian generals against Australia, whose intervention in East Timor spelled the end of military control there.

But just as observers warn about the dangers of leaping to conclusions, it is clear that the Indonesian government, and others, will seek to use the Bali bombings to suit their own ends.

One such end among the less liberal Asean countries is to see the group become a powerful engine against 'terrorism', in close contact with the US and its war aims. Typically, however, Asean is not united on this. Several Asean members want to keep their options open in the evolving global order by staying in tune with China and its needs, rather than focusing solely on the US war on terror.

In the short term, the US and Singapore governments are likely to feel vindicated for their increasingly shrill warnings about a credible threat of terror in Indonesia.

For a year now, both have insisted that Indonesia should 'do more' against terrorism.

Several diplomats agree doubt can no longer be cast on the existence of a terror network led by a group called Jemaah Islamiah, based in East Java but stretching across Malaysia and into the Muslim south of the Philippines.

Malaysian government officials have ably used the US terror claims to justify an increasingly liberal use of its draconian Internal Security Act (ISA), which allows for the detention of suspects without charges or trial.

Any complaint from democrats in their midst is met with the claim that since the US now frequently imprisons people without charges or trial, it is time for the bleeding hearts of the world to realise Malaysia was right all along.

The hawks in Indonesia's political context now have the same opportunity to shine. Fresh evidence of this was provided in a discussion with Indonesia's Minister for State Enterprises Laksamana Sukardi, when he and the president's husband Taufik Kiemas, appeared in a Kuta restaurant on Monday evening.

'It was almost unanimous in cabinet [on Monday] that we have to have firm action against this . . . there should be no tolerance,' he told the South China Morning Post. 'This is like an emergency war scenario . . . we need good tools.'

Such tools would include a reinvigorated armed forces, with new equipment and a rehabilitated image, he said, along with a commitment from parliament to support President Megawati Sukarnoputri in any new policy initiatives she may decide.

Mr Laksamana and others are clearly hoping this new front in the war on terror could be a catalyst to unite the nation around the president, who remains a weak figure due to political infighting and the growing role of Islam in national life.

A legislator from the Suharto-era Golkar party, Marzuki Achmad, said he agreed on the need for a more powerful executive.

'We need something like the ISA. The people want it, not just the government,' he said.

The picture emerging from such comments is of a concerted retreat from the democratic freedoms that Indonesians have fought for, and often died for, in the years before and after the fall of Suharto in 1998.

But many Indonesians are not happy with the idea.

'We have had bitter past experience with the misuse of power in this country. And recently there has been this sudden U-turn in US policies,' said Mr Laksamana.

'Before, it was all about human rights, freedom of the press and democracy. Now they want us to swing towards having a more powerful government again.'

For Dr Anwar, the Bali attack presents an opportunity for Asean to tackle the root causes of terror, not just to beef up military forces.

'Asean has a record of being able to rise to such a challenge. My hope is that the Bali tragedy could be used as an opportunity for Asean member countries - both individually and in concert - to get their act together,' he said.

'I hope the Bali event will be a wake-up call for Asean to strengthen its commitment to regional co-operation, to go beyond the joint communique against terrorism to make it real.'

Vaudine England is the Post's regional correspondent