Police in Indonesia's second-biggest city Surabaya have reacted angrily to an Australian warning that anti-Western groups may be planning a "terrorist" attack there, saying there were no signs of threat.

"I don't know how they obtained the information – I have no idea," East Java police spokesman Sad Harunantyo said. "Maybe they [Australia] got the information from a Ouija board. It seems they are only looking for trouble," he told AFP. "We're continuing to monitor the situation and there are no signs that terrorists are planning to launch attacks on Australians, Americans or other Westerners," he said.

The spokesman said police had been on full alert since Thursday because they anticipated protests against the US-led war on Iraq. "There were protests and establishments linked to the US were picketed but those protests were peaceful," he said. Police would remain vigilant, he said.

The Department of Foreign Affairs and Trade (DFAT) yesterday advised Australians not to visit Surabaya, where protesters yesterday picketed the US consulate and a McDonald's outlet in protests against the war.

"The DFAT advises that it has credible information that terrorist groups with a history of targeting Westerners and Western interests may be planning terrorist activity on or about 23 March in Surabaya, Indonesia," the department said in a statement.

It urged Australians already in Surabaya, the capital of East Java province, to stay home and exercise extreme caution on or about Sunday. They were advised to avoid commercial and public places frequented by foreigners.

"Obviously we're very concerned about the nature of the threat," Australian embassy spokesman Kirk Coningham told AFP in Jakarta.

Australia has issued a general travel warning advising its citizens to defer non-essential travel to Indonesia following the October 12 bombings on the resort island of Bali.

Australia, which with Britain is one of the strongest supporters of the war, has deployed about 2,000 military personnel to join the US-led military action.

Eighty-nine Australians were killed in the Bali bombings, blamed on the Jemaah Islamiah regional terrorist network.

Anti-war protests have erupted in Indonesia, the world's most populous Muslim country, since the US launched a strike on Iraq on Thursday. Indonesia has promised to protect foreigners.

Yesterday, about 2,000 people from various groups rallied outside the US consulate in Surabaya and symbolically sealed a McDonald's and a Citibank building. The consulate was closed yesterday and would remain shut until further notice, the US embassy said.