Jakarta – Indonesian police fired warning shots to disperse a mob of hundreds of villagers in North Sumatra demanding the closure of a pulp and rayon mill they charge is polluting their land and a nearby resort lake, reports said Saturday.

The clash Friday at the PT Inti Indorayon Utama factory near the town of Balige and the famed Lake Toba came as some 500 angry villagers threw rocks at trucks going to the plant, the Indonesian Observer reported.

There were no injuries in the shooting, but 20 people were arrested and an assortment of crude weapons confiscated, the newspaper said.

In Jakarta Friday, Indonesian President B.J. Habibie ordered the temporary closure of Indorayon and instructed a team of health and environment officials to conduct an inquiry.

"This company was a trouble-maker therefore its operation is temporarily suspended," North Sumatra Governor Rizal Nurdin was quoted as saying by the Jakarta Post after a meeting with Habibie.

A company spokesman called the closure order unnecessary as almost a year of violent protests, including the blocking of supplies to the plant, had forced it to remain idle since January, the report said.

On Thursday the bodies of two Indorayon employees missing since Tuesday in the area of the plant were found floating in a river, the state Antara news agency said Friday.

The dead men had been among four people abducted by a mob in the village of Dolok Nauli on Tuesday. A third man is still missing while a fourth escaped from the mob, Antara said.

Although the motive for the double-killing and abduction was unclear, police sources quoted by the agency linked the incident to the protests against Indorayon.

Company workers have been conducting their own rallies and protests to demand that the company stays open.

[On March 19, Dow Jones Newswires reported that President Habibie had ordered the temporary closure of the mill. Minister of Tourism, Art and Culture Marzuki Usman said the future of the factory would be decided by a team that will study the environmental impact of the plant - James Balowski.]