Indonesian cleric Abu Bakar Bashir has rejected charges he was involved in terrorist plots including the 2002 Bali bombings and said President George W. Bush was behind the allegations.

Appearing in court as his defence team presented their arguments in his trial on terrorist charges, the hardline cleric again denied that he led the Al-Qaeda-linked Jemaah Islamiyah group. A court in 2003 cleared him of that charge.

Prosecutors have sought an eight-year jail term for Bashir for his alleged link to a series of deadly bombings in recent years blamed on Jemaah Islamiyah, including the Bali nightclub attacks in which 202 people were killed.

The 66-year-old bearded cleric said the United States had pressured the government to put him in jail or hand him over to the United States and "hired" Indonesian police to prevent him from campaigning for Islamic law, or Sharia.

"My sermons have made America under George W. Bush and his acolytes afraid and feel uneasy," Bashir said in his defence plea. "I'm sure that this case has been fabricated by George W. Bush and his acolytes to undermine Islamic Sharia from inside," he said.

He denied that he was present at a Jemaah Islamiyah ceremony at a rebel camp in the southern Philippines in 2000, or that he had relayed Osama bin Laden's calls to fight the United States.

He accused the US of a "cunning" campaign to impose its values on Muslims worldwide. "They are not only doing it in Indonesia but also in Afghanistan by destroying the Taliban regime which established Islamic Sharia. They are doing it in Iraq by killing Muslim men, women and children," he said.

Bashir fled to Malaysia in the 1980s to escape persecution against Muslim activists by then-dictator Suharto. He returned to Indonesia in 1999 following Suharto's downfall the previous year.

"Since returning from Malaysia my activities were simply preaching and teaching, making a living honestly," he said, claiming he knew nothing of Jemaah Islamiyah's existence.

Bashir was on trial for inciting followers to stage the Bali bombings and a attack on the Jakarta Marriott hotel which killed 12 people in 2003, charges for which he could have faced the death penalty if convicted.

Prosecutors have said there was insufficient evidence to back up the primary charge that Bashir and his supporters actually planned the attacks or incited others to engage in terrorism. However they said evidence showed he was guilty of involvement in acts of terrorism.

Bashir, who was cleared in 2003 of leading Jemaah Islamiyah, was released from jail in April last year after serving a sentence for an immigration offence.

He was immediately rearrested by police, who said they had new evidence of terror links. Prosecutors in their indictment said Bashir, as Jemaah Islamiyah chief, visited a rebel training camp in April 2000 and relayed a "ruling from Osama bin Laden which permitted attacks and killings of Americans and their allies." Jemaah Islamiyah has been blamed for numerous attacks including a suicide bombing outside the Australian embassy in Jakarta last September that killed 11 people.