Bill Guerin, Jakarta – Within hours of his release from prison, Abu Bakar Ba'asyir wasted no time reiterating his jihadi mission. The firebrand Islamic cleric, identified by the United States and Australia as one of Southeast Asia's most dangerous terrorists, urged Indonesian Muslims to "unite behind the Islamic goal and strengthen the Islamic brotherhood and work to establish sharia" (Islamic law).

Ba'asyir, 68, widely recognized as the spiritual head of the militant Jemaah Islamiyah (JI) organization, was convicted last year on conspiracy charges related to his role in the 2002 Bali bombing that killed more than 200 people. His early release after serving 25 and a half months was criticized by US and Australian officials for being much too lenient, and some have warned it could re-energize the JI network he allegedly heads.

But how much of a threat does JI really pose nowadays? Indonesia's US-trained and -equipped elite police counter-terrorism team, known locally as Detachment 88, has recently captured or killed more than 200 suspected JI-linked militants. The legal status of most of the detainees is unclear, though officials say they are being held under 2003 anti-terrorism legislation that allows for detention without trial.

Indonesian police have recently made some high-profile hits. They ran down Malaysian geophysicist Azahari Bin Husin, JI's chief bomb maker, who allegedly designed the explosives for the 2002 Bali bombing, the Marriott Hotel bombing of 2003, and the 2004 bomb attack on the Australian Embassy in Jakarta. He blew himself up before security officials could nab him, though they did uncover evidence of plans for future bomb attacks. Indonesian authorities say that nearly all of the militant suspects in their custody have cited Ba'asyir as their inspiration. (Ba'asyir, for his part, has consistently denied that JI exists.)

Ba'asyir's release could give a big boost to regional jihadists, US and Australian officials warn. Speaking to to a delegation of foreign creditors from the Consultative Group on Indonesia soon after the release, President Susilo Bambang Yudhoyono said, "Our national efforts to combat terrorism are not measured by the release of Ba'asyir. We are fully committed in continuing the fight against terrorism."

Syamsir Siregar, head of the State Intelligence Agency (BIN), meanwhile, expressed his hopes after Ba'asyir's release that he will cooperate with terrorism investigators to nab militant suspects.

Australia and the US have asked Indonesia to keep Ba'asyir under 24-hour watch, but the Justice Ministry has said his release was unconditional. Kevin Rudd, Australia's federal opposition spokesman on foreign affairs and trade, said it means that there is now an "anti-Australian, anti-Western mass murderer on the loose in Indonesia".

A US Embassy spokesman said there was cause for concern: "We were deeply disappointed that a person convicted of a sinister conspiracy was given such a short prison sentence."

Despite calls from Washington and Canberra, Jemaah Islamiyah still has not been banned in Indonesia. Yudhoyono, echoing Ba'asyir's line, says there still is not enough evidence to establish that the organization actually exists. Western terrorism experts and the Singaporean government have issued a series of in-depth research reports that chronicle JI's history, accomplished and foiled plots, and alleged members. Those reports, drawing on regional intelligence sources, say JI has a vision of carving out a new pan-Islamic state across Southeast Asia encompassing Indonesia, Malaysia, Singapore and parts of the Philippines and Thailand.

What's unclear is whether that literature is now out of date. Some terrorism experts believe that the recent crackdown has severely dented JI's operations and splintered its leadership. According to counter-terrorism official Syamsir, JI is now controlled by three hardline Indonesians: Zulkarnaen, the alleged commander of the militant wing; explosives expert Abu Dujana; and operations chief Zuhroni. Noordin Mohamed Top, a Malaysian accused of orchestrating a series of JI-inspired bombings in Indonesia, is still at large and allegedly takes his orders from the top three, according to Siregar.

Terrorism experts say that the 2003 arrest of JI operations chief Riduan Isamuddin, or Hambali, in Thailand was a major blow to JI's organization and operations. Hambali, who has been dubbed by the US Central Intelligence Agency (CIA) the Osama bin Laden of Southeast Asia, is being held at an undisclosed location by US officials.

Indonesian officials point to the lack of any significant terrorist attacks over the past 18 months as evidence that JI's potency has been reduced as a result of the recent crackdown.

Pleasing the West

Indonesia's strategic significance to the United States assumed a new and urgent dimension after the September 11, 2001, terror attacks. Southeast Asia was soon thereafter identified by Washington as its second front of the "global war on terror". US officials have since worked hand-in-hand with regional security forces, particularly in the Philippines, Thailand and Singapore, to track and apprehend suspected terrorists.

Indonesia, with its complex political dynamics and fractured internal security apparatus, was until recently viewed by the US as the weakest link in its regional counter-terrorism campaign. Washington had frequently warned of terrorist cells and planned attacks, including intelligence reports that presaged the 2002 Bali bombing.

Former US ambassador to Indonesia Ralph "Skip" Boyce had frequently chastised president Megawati Sukarnoputri's government for failing to neutralize the terrorist threat. After repeated US warnings fell on deaf ears, Washington threatened to withdraw its diplomatic presence in Jakarta apart from essential staff members.

Megawati's inaction was rooted in her concerns about a possible nationalist backlash and breakup of her fragile coalition government – members of which, notably the vice president, were sympathetic to fundamentalist Islamic causes – if she launched a crackdown on suspected Islamic militants. Moreover, a crackdown would have handed the military new powers at a time Megawati was striving to end the military's dominant role in politics.

Washington drastically changed its tune after the election of Yudhoyono in September 2004. During an official visit to Indonesia in March, US Secretary of State Condoleezza Rice referred to the country as a model of democratic and moderate Islam. Following up, B Lynn Pascoe, the current US ambassador to Indonesia, said, "I am struck by the dramatic changes in the US-Indonesian relationship. Our presidents have met three times during a short period for substantive discussions of bilateral and global issues."

Last year the US resumed military-to-military contacts with the Indonesian military (TNI) after nearly a decade's suspension because of human-rights issues, including the TNI's involvement in the devastation of East Timor in 1999. More recently, Washington has also dangled the prospect of a bilateral free-trade agreement with Jakarta, similar to the pacts it has signed or is negotiating with regional strategic allies in Singapore, Australia and Thailand.

Washington has supported Yudhoyono's quiet, yet tough, tack. The US Embassy in Jakarta quietly vets potential members of the Detachment 88 counter-terrorism unit it supports for their individual human-rights records. And Yudhoyono's government's gradual arrest of more than 200 suspected militants has so far failed to generate major media or human-rights groups' attention.

Instead, counter-terrorism officials have focused on the few high-profile catches. The key actors responsible for the Bali attacks have been identified, caught and tried. Three of them were sentenced to death. Last September, suspected JI militants Ahmad Hasan and Iwan Darmawan Mutho were also given death sentences for their alleged roles in the 2004 Australian Embassy bombing.

Publicly moderate, privately tough

A retired army general and former top security minister, the US-trained Yudhoyono clearly fits the mold of Washington's idea of a model Muslim leader: publicly moderate but behind-the-scenes tough on terrorism. Those credentials apparently helped to assuage the US administration's previous concerns about the Indonesian military's spotty human-rights record. In February 2005, just five months into Yudhyono's term, the US lifted long-running restrictions and resumed full International Military Education and Training (IMET) for Indonesian armed forces.

In his meeting this month with US Defense Secretary Donald Rumsfeld, Yudhoyono said he wanted to establish a permanent military relationship with the US. He has a friend in Rumsfeld, but detractors in Congress. Asked about human-rights reforms in Indonesia's military, Rumsfeld said he did not believe that the ban on US military assistance should have been imposed in the first place. "I am not one of those people who believe that every country should be like the United States," he said.

Indonesian Foreign Affairs Minister Hassan Wirayuda noted a "growing and accepted view in the US to see Indonesia in a much broader context than in snapshots of events like human-rights violations... and military reform".

Of course a politically stable, US-friendly Indonesia serves Washington's broad foreign-policy objectives of combating terrorism and consolidating its military positions in the region – notably at a time China's influence is growing. The US is particularly concerned about possible terrorist threats to the Malacca Strait, the waterway separating Malaysia, Indonesia and Singapore that links the Indian and Pacific Oceans and through which half of the world's oil supplies and a third of global commerce flows.

Piracy is rampant in the Malacca Strait, and US and Southeast Asian intelligence services are reportedly investigating possible links between pirates and terrorist groups, particularly JI. The terror rationale: a strike on shipping lanes would cause massive political and economic disruption and make vulnerable the United States' security installations in the region. A bigger US naval presence in the Malacca Strait also conveniently puts Beijing on edge, as most of China's fuel imports travel through the narrow shipping lane.

The US has been pushing to play a bigger role in counter-terrorism patrols, which some Association of Southeast Asian Nations members, particularly Malaysia, have at least privately resisted.

Indonesian Defense Minister Juwono Sudarsono also warned Rumsfeld that the US should not interfere too much in regional counter-terrorism efforts.

"The primary responsibility for security and anti-terrorism measures should lie with national governments, rather than the US forcing its will on other countries," Sudarsono said. "As the largest Muslim country, we are very aware of the perception... that the United States is overbearing, which creates a sense of threat for many groups."

For Washington, a closer relationship with a democratic and moderate Indonesia is an important confirmation that the "war against terrorism" is not a confrontation with Islam, even though there has definitely been an upsurge in Islamic extremist groups in Indonesia since the fall of president Suharto in 1998.

Islamic groups are lobbying to transform the historically secular country into an Islamic state, while others like JI allegedly still want to pursue jihad against the West. The majority of Southeast Asia's Muslims, including in Indonesia, have widely rejected Islamic radicalism at democratic polls – a point Washington has only belatedly awoken to.

Any indication that Washington is somehow backing state-sponsored human-rights abuses in the pursuit of counter-terrorism policies would hand Indonesia's radicals an important victory – as it has in Iraq. As the US and Yudhoyono's administration draw closer together in fighting the "war on terror" and beyond, there is still a deep sense of mistrust among even moderate Muslims about Washington's intentions.

Therein lies the rub behind Ba'asyir's release, which was done in spite of shrill US and Australian objections. If and when the radical cleric resumes his intolerant, anti-US rhetoric, his speeches will be closely monitored. And if the bombs start to blast again, he'll be the first suspect called in for interrogation. But increasingly, it seems that Ba'asyir and JI – at least for now – are shadows of their former larger selves, and that behind the public posturing the US and Australia couldn't be happier with Yudhoyono's counter-terrorism policies.

[Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has worked in Indonesia for 20 years, mostly in journalism and editorial positions. He has been published by the BBC on East Timor and specializes in business/economic and political analysis related to Indonesia. He can be reached at softsell@prima.net.id.]