Jakarta – If the forces of peace are winning over the forces of violence in the "war on terror", it is far from obvious in Indonesia.

Less than a week after a car bomb allegedly set off by a suicide bomber (a rarity in the Southeast Asian brand of Islamist terror) killed at least 11 people and injured scores in and around the US-owned JW Marriott Hotel in the Indonesian capital, the alleged leader of the region's most feared Islamist organization delivered a chilling message to his followers from his Jakarta prison cell. And a few days before that, Amrozi bin Nurhasyim, sentenced to the firing squad for his role in last October's terrorist bombings in Bali, accepted the verdict with a smile and a thumbs-up, declaring: "If I die there will be hundred more Amrozis. You can't stop us. It will never end."

On Sunday, Abu Bakar Ba'asyir, a Muslim extremist leader allegedly linked to al-Qaeda and on trial for treason and deadly church bombings, told his followers they must fight to impose Islamic laws dating back 1,300 years and not worry about being called "terrorists".

"I say do not be afraid of being labeled as trying to overthrow [the government] or as terrorists when you are carrying out Islamic Sharia [law] in full," Abu Bakar Ba'asyir said in a speech read out to 3,000 followers at a meeting of the Mujahiden Council of Indonesia (MMI) in Solo, Central Java. Ba'asyir's base is in Solo, where he headed an Islamic school allegedly attended by some of the Bali bombers.

"The Indonesian government must not discredit Muslims wanting to perform their religious duties and should not arrest clerics, religious leaders or religious teachers because that will anger God," Ba'asyir was quoted as warning in a speech sent from his Jakarta prison.

Ba'asyir's speech was read out to stern-faced followers who endorsed it by shouting, "Allahu Akbar" (God is great), including men dressed in camouflage uniforms with their heads wrapped in checkered scarves to conceal their faces. "Allahu Akbar" was also the defiant cry of Amrozi last Thursday, the day he was condemned to death.

The fiery words of Amrozi and Ba'asyir are in stark contrast to those of the moderates who still predominate in the Muslim regions of Southeast Asia, including Indonesia, the world's most populous Muslim country.

"Islam is a religion that teaches peace, charity, love and forgiveness," I Made Karna, the chief judge, said during the sentencing of Amrozi. "The action of the defendant can be classified as cruel and inhuman." His sentiments were echoed by another judge, Lilik Mulyadi, who said, "Islam never teaches violence, murder or any other crimes."

Ba'asyir begged to differ. Hours before last Tuesday's bombing of the Marriott, the white-bearded cleric testified in a Jakarta court that Sharia law could justify several church bombings scattered across Indonesia on Christmas Eve 2000, which killed 19 people.

"If those examples had reasons which were not based on Sharia law, it is obviously wrong. But if there is a Sharia reason – then from the religious point of view it is right, but not from the national law's point of view," Ba'asyir told the court.

Ba'asyir's followers at the MMI conference met to demand imposition of Sharia law throughout Indonesia, based on the Muslim holy book the Koran, written more than 1,300 years ago. Sharia law metes out severe punishments, including amputation of a hand for theft, and the stoning of death for adultery and other crimes.

Sharia law has never been popular in Indonesia. The organizers of Sunday's rally backed candidates in the last national election, but they failed to win any seats in parliament. However, some commentators have remarked that ordinary Indonesians, increasingly fed up with their secular government's failure to deal with the corruption and incompetence that have denied them justice and economic well-being, have become more sympathetic to reactionary religious ideas such as Sharia. Whether or not that is so, those who argue that frustration with injustice and bad government breeds violence and terror can find plenty of evidence not only in Indonesia but in other Muslim pockets in Southeast Asia, notably the southern Philippines.

Ba'asyir has been accused of being a leader of the terrorist group Jemaah Islamiyah (JI), though he has claimed that the US Central Intelligence Agency invented both al-Qaeda and JI in order to persecute Muslims throughout the world. Notwithstanding that claim, Jemaah Islamiyah is believed to have begun in the mid-1980s fighting to create an Islamic "caliphate" in Southeast Asia – which would unite Muslim-majority regions of the southern Philippines, southern Thailand, Malaysia, Singapore and Indonesia – where Sharia law would be imposed.

JI was blamed for last October's bombing on Bali that killed 202 people and for last week's Marriott bombing in Jakarta. Ba'asyir was arrested several days after the October 12 Bali bombing and accused of involvement in the Christmas assaults on the churches, which he denied. He was also accused of teaching and preaching with the alleged commander of the Bali bomb plot, Mukhlas, also known as Ali Ghufron, who is currently facing trial in Bali.

Ba'asyir was also alleged to have known Amrozi, who was convicted on Thursday for buying the van and explosives used in the Bali bombing.

The most wanted fugitive in Asia, suspected JI leader Hambali, whose real name is Riduan Isamuddin, reportedly attended Ba'asyir's Islamic sermons, as did alleged Bali bomber Imam Samudra. Ba'asyir and Hambali are suspected of being the masterminds behind JI. Hambali was also suspected of orchestrating a meeting of al-Qaeda members in January 2000 in Malaysia with two men who hijacked planes in the September 11, 2001, attacks on the United States that killed about 3,000 people.

"I affirm that this group [Jemaah Islamiyah] is behind the Marriott bombing, based on intelligence reports following the arrest [in July] of nine suspects who are also JI members," Indonesian Defense Minister Matori Abdul Djalil told reporters on Friday. "There are many more Jemaah Islamiyah members on the loose in Indonesia. Because of this, I am sure that JI is behind all of this."

The fugitives possess deadly skills, including bomb-making, he added. "Each one of them has special abilities received from training in Afghanistan and Pakistan," Matori said.

Investigators are looking for evidence linking the Bali bombing and the Marriott Hotel attack, based on possible similarities in the mixture of explosives, detonation by mobile phones and the scraping off of the vehicles' identification numbers.

Police identified Asmar Latin Sani, 28, from Sumatra – where the Jakarta government is battling armed separatists in the state of Aceh – as the driver of the Toyota minivan that exploded at the Marriott Hotel, after finding his scarred and blistered severed head after it had been hurled by the blast on to the hotel's fifth floor. Asmar has not been linked to the Aceh conflict.

Within hours of the Amrozi verdict, Indonesia's moderate clerics weighed in with their views in support of the judicial process that condemned him to death. They included Ahmad Syafi Maarif, who heads a 20-million-strong body of moderate Muslims in Indonesia, including clerics and religious scholars, called the Muhammadiyah.

Yet, as the Jakarta Post noted in an editorial on Friday, prevailing over the small but effective network of Islamic extremists will not be easy. The English-language daily viewed last Tuesday's car-bomb attack at the Marriott as a stark warning by Muslim militants that they will not let moderates win.

"Given the timing, and the similarities of means and methods employed in the Bali and [Jakarta] blasts, it is difficult not to read the latter as an ominous message to the government of President Megawati Sukarnoputri and to the panel of judges" in the Amrozi case, the editorial said.

Nevertheless, the moderates refuse to be silenced. After the bomb attack, Indonesia's largest religious organization, the 30-million-strong Nahdlatul Ulama, called on the public to avoid provocation and said the bombing had nothing to do with Islam.

Muslim moderates, however, will have to work hard to ensure that their views continue to attract the much more substantial numbers they currently draw. As the Indonesian newspaper Koran Tempo commented in an editorial, "Amrozi's thumbs-up drives us to reply that we will never run out of militants ready to become martyrs."