How should Australia respond to the growing terrorist threat in Indonesia? Unfortunately, if the knee-jerk reaction of many politicians and commentators is anything to go by, we should turn to the military as the only force in Indonesia capable of confronting terrorists.

This argument seems based on a perception of Jemaah Islamiah as a Taliban-like military force that can be stopped only by military means. But JI is a tiny underground movement that is not organised in battalions but in small groups carrying bombs. JI is not a mass movement enjoying widespread public support – even from fundamentalists in Indonesia.

There was no popular protest when the Bali bombers were arrested and no protest has followed the death sentence given to Amrozi last month. Indonesia's Muslim political parties are more concerned with winning votes in next year's general election than defending terrorists. In fact, it was the leader of one of the "fundamentalist" parties, in his capacity as Minister of Justice, who introduced the anti-terrorism law under which the Bali bombers have been charged.

Not only does the extremist fringe of Muslim fundamentalism lack popular support but it is divided into fractious groups. Two of the most prominent – Laskar Jihad, which fought in Maluku, and the Islamic Defenders' Front, which attacked bars and brothels in Jakarta – are not part of JI and have not been involved in JI-style bombing. Another fundamentalist organisation, the Hizb ut-Tahrir, has not been involved in violence. Recent reports suggest that JI itself is split in the face of the adverse public reaction to the Bali, and especially the Marriott hotel, bombings.

Of course, JI has the capacity to do much harm, but it is not a military threat. Operations against it are primarily a police responsibility. Although the overall quality of the Indonesian police is abysmally low, it – like the military – contains some highly competent officers who were brought together and given adequate resources in the Bali case. With technical assistance from foreign police, especially Australian, the key Bali bombers were identified and about 80 members of the JI have been detained. Australian co-operation with the Indonesian police has been remarkably successful and should continue as the main focus of Australian support.

What about Kopassus and co-operation with the Indonesian military? There are two separate issues. First, should Australia follow the Bush administration, which is moving to restore military relations with Indonesia – despite opposition from the US Congress – as part of the war on terror? US officials argue that close military relations will enhance military professionalism, strengthen democratic commitment and sensitise military personnel to human rights issues.

Past experience, however, was disappointing, as recognised at the time by the Americans when they cut long-standing relations in response to abuses in East Timor. Answering a question about Kopassus's human rights record last month, Australian Defence Force chief Peter Cosgrove said: "We should focus on the here and now" – as if the Indonesian military is no longer involved in human rights abuses.

But when seven Kopassus members were recently convicted (and given light sentences) for murdering the Papuan separatist leader Theys Eluay, Indonesian army chief Ryamizard Ryacudu rejected the judgment and said that the soldiers should be treated as national heroes. It is hard to believe that the Indonesian army under its present leadership has really reformed itself.

In my view, close relations with the Indonesian military should wait until there are strong indications of the presence of a real will for reform. At present the argument for co-operating with Kopassus, as Cosgrove has pointed out, is much more limited. What would Australia do if terrorists hijacked a Qantas plane in Bali? It is unlikely that Jakarta would permit Australia's Special Air Service to conduct the operation. Instead, the Indonesian Government would call in the Kopassus anti-terrorist unit. One alternative for Australia would be to let the Kopassus unit do the job. The other would be to somehow co-ordinate with them. If the latter option were adopted, it would help if links of some sort or other had already been established.

Some Australians argue that links with the military should be avoided at all costs but do not object to co-operation with the police. One problem, however, is that the police do not have the capacity to deal with a major hijacking. Maybe we should offer to train them – but what if the hijacking took place next week? In any case, the police unit that would take on this role is the Brimob, which has a human rights record to rival that of Kopassus.

Co-operation with one component of Kopassus for a strictly limited purpose is far from a return to the warm military relationship of the past, which included training and exercises that strengthened the military's capacity for internal repression. My concern, however, is that some elements within the Australian defence establishment might, like some of their US counterparts, see this as the thin end of the wedge to expand military relations more generally, without regard to whether the Indonesian military really is committed to reforming itself.

[Harold Crouch, a former director of the International Crisis Group's Indonesia Project, is a senior fellow in the research school of Pacific and Asian studies at the Australian National University in Canberra.]