Jakarta – The recent breakup of an alleged Jemaah Islamiyah (JI) militant cell shows terrorism is still a threat in Indonesia despite improved security, the US ambassador reportedly said Wednesday.

The United States lifted a warning against travel to Indonesia in May, citing "objective improvements" in the security situation.

But the arrest of 10 terror suspects with a cache of powerful bombs in South Sumatra between June 28 and July 2 underscored that the danger remains, ambassador Cameron Hume was quoted by Antara news agency as saying on the resort island of Bali.

"We believe the threat of terrorism in Indonesia has in the past few years been reduced and the country is now safe," Hume said. "But the arrest of several terror suspects in Palembang, South Sumatra, recently proves the threat of terrorism still exists in Indonesia."

JI is blamed for multiple attacks in Southeast Asia including the Bali bombings in 2002 and 2005 that killed more than 200 people. The US travel warning was issued in 2000 after a string of bombings in the capital Jakarta which were also attributed to the militant Islamist network.

Indonesian President Susilo Bambang Yudhoyono has urged Australia to lift a similar travel warning but Canberra has resisted, citing what it says are persistent threats to foreigners.