[The following are excerpts pertaining to Indonesia by Deputy Secretary Of Defense Paul Wolfowitz to the Defense Forum Foundation meeting about the war on terrorism on October 18, 2002.]

Question: In light of the heinous bombings in Bali this past weekend, I'd like to ask you a question about Indonesia, a country you know very well.

Jakarta – Indonesia's economic growth is expected to be shaved to as low as 3.1 per cent this year after the deadly terrorist bombing in Bali, analysts say, citing rising risk premium and falling consumer confidence.

[One of Indonesia's largest and most militant militias, the Laskar Jihad, has been publicly disbanded in a surprise development which took place just hours before the Bali bombings. Analysts say the radical group had lost the backing of an influential body of islamic clerics.

John Aglionby, Kuta – Indonesia's most violent radical Islamist group, blamed for the deaths of thousands of Christians in eastern islands during four years of communal conflict, dissolved itself on Saturday, hours before the Bali bombings, it emerged yesterday.

Hamish McDonald – Although the Foreign Minister, Alexander Downer, has dismissed the line of suspicion as "silly", some officials in his entourage must have wondered as they did the rounds of Indonesian military and police chiefs in Jakarta yesterday how clean were some of the hands they were shaking.

[Despite claims that the Laskar Jihad, Indonesia's largest and most militant Islamic militia has disbanded, Christian leaders say the group is still active. Boat loads of militants have left the Malukus provincial capital Ambon, but local Christian leaders say over 1,000 Laskar Jihad members remain.

Australia's defence minister Robert Hill has confirmed Australia is considering resuming military links with Indonesia's notorious Kopassus special forces.

Australia broke off all joint exercises with Kopassus in 1998, partly due to concerns about its support for militiamen operating in East Timor.

The bombing in Legian, Bali, which killed 183 people and wounded hundreds of others has already impacted on a number of groups.

Max Lane – On October 5, Indonesian police arrested Ricky Tamba, secretary-general of the Popular Youth Movement (GPK), an urban poor youth organisation that acts in political solidarity with the Peoples Democratic Party (PRD).

Kathy Marks, Bali – Sesca Rompas climbed on to a plastic stool and peered through a dirty window at her brother, Aldo Kansil, lying motionless on a bed below. He was a pitiful sight: two drips attached, arms swathed in bandages, his face an angry mosaic of burns.

Robert Go, Jakarta – Indonesia's most violent Muslim extremist group, Laskar Jihad, has been disbanded. The move comes in the face of the deadly blasts in Kuta which have clearly shifted public opinion against such terrorist groups and the ideologies they preach.

Mark Riley and Tom Allard – The Central Intelligence Agency issued an intelligence report listing Bali among possible targets of a pending terrorist attack just two weeks before the weekend's devastating Kuta bomb blast, the Washington Post is reporting.

Ahmad Junaidi, Jakarta – Thousands of demonstrators representing entertainment centers in the city staged a rally in front of the City Council building and the City Hall on Monday, demanding that the administration allow them to remain open during the Ramadhan fasting month for Muslims in a few weeks.

Moch. N. Kurniawan, Jakarta – Military personnel in conflict areas have worked to escalate violence there in order to maintain their control over business activities, experts said on Monday.

They said military personnel in conflict areas were often involved in weapon smuggling, illegal logging, and car smuggling.

Max Lane – On October 14, in the Australian parliament Prime Minister John Howard seized on the terrorist incident in Bali last weekend to justify a further strengthening of repressive so-called anti-terrorist laws as well as of the security apparatus in Australia.

Bill Guerin, Jakarta – For Indonesia the pretense is well and truly over.

ASAP condemns outright the barbaric bombing that took place in Bali on October 13 and that took the lives of at least 200 people from Bali, Indonesia, Australia and around the world. This was an act of mass murder carried out against defenceless people. ASAP extends its sympathy and solidarity to the families of all those killed and injured.

Multa Fidrus, Tangerang – It is no longer a secret that many police and military officers are involved in illicit businesses in many cities and towns across the country, and that would apparently include Tangerang.

Greg Barton – The long hand of the military may have left its prints on the Kuta bomb. The shocking news from Bali probably couldn't get much worse. But the hard truth is, it just might. Most of the likely explanations for what happened point to systemic problems that are likely to escalate before they subside.

Louise Williams – Radical Islam has long played a bit part on the fringes of Indonesia's murky domestic political scene. The crucial question raised by the Bali bombings is whether the same forces of Islamic extremism have now been recruited to play a similarly destructive role in the international arena; as terrorists.

David Jenkins – In 1980, five Indonesian members of a so-called Komando Jihad (Holy War Command) hijacked a Garuda jet and forced it to fly to Bangkok. The plane was stormed by Indonesian commandos who killed four of the hijackers and the fifth man died in mysterious circumstances while being taken back to Jakarta.

[Business leaders have called for immediate action from the President to prove her leadership saying they fear social revolution if the government fails to unite to act decisively. The country's economy will be seriously set back by the bombings – with the tourism industry the first and most obvious casualty.]

Jakarta – Golkar Party chairman Akbar Tandjung has been anticipating the worst in his appeal of the Central Jakarta District Court's verdict wherein he was sentenced to three years for corruption.

Kafil Yamin, Jakarta – Before the full glare of television cameras this month, Indonesian army chief Gen Ryamizard Ryacudu walked toward a line of 20 soldiers and tore one-by-one the badges of rank from their uniforms.

It's hardly surprising that rabid Muslim clerics and shortsighted nationalist professors are blaming the US for the horrendous Bali nightclub bombing.

But something is seriously wrong when Indonesia's leading business newspaper also suggests that foreign countries might have masterminded the carnage as part of a covert plot to take over the nation's rich natural resources.

Irwan Firdaus – A car bomb destroyed a crowded nightclub on the tourist island of Bali Saturday, sparking a devastating inferno that killed at least 182 people and wounded 300 – many of them foreigners. Officials said it was the worst terrorist act in Indonesia's history.

Dean Yates, Bali – Bombs ripped through a packed nightspot on Indonesia's traditionally tranquil tourist island of Bali overnight, killing at least 182 people, many of them foreigners.

Moch. N. Kurniawan, Jakarta – The antiterrorism bill needs to provide a clear definition of a terrorist act, valid information to arrest terrorists and fair treatment of suspected terrorists, experts said on Friday.

Robert Go, Jakarta – A top rival of President Megawati Sukarnoputri has gone on the offensive, criticising the leadership and calling for a new man in the driver's seat.

The attacks come at a time when surveys have shown declining popularity ratings for the government.

Alan Sipress, Jakarta – The Bush administration has warned Indonesian officials that it will withdraw some diplomats from the country unless police step up efforts to investigate a grenade explosion outside of a US building last month, a senior Indonesian security official said today.

Prostitutes in Indonesia's second largest city, Surabaya, have vowed not to make themselves available to officials to protest at a ruling banning their activities during Ramadan, a newspaper reported yesterday.

Robert Go, Jakarta – The newly-proposed National Security Council (DKN) provides President Megawati Sukarnoputri's government with a layer of protection from possible Islamic and nationalist backlash, if and when it steps up action against domestic terror threats.

Jakarta – Eighty four students who attacked a man they suspected of being an intelligence officer appeared at the Central Jakarta District Court on Thursday and were each ordered to pay a Rp 25,000 (US$2.8) fine or spend three days in police detention.

Tony Sitathan – Irwin Goenawan graduated at the top in his class studying for magister manajeman, the Indonesian equivalent of a master of business administration (MBA) degree. He comes from a middle-class family.

Haze from forest and ground burning drifted back over Indonesia's Central Kalimantan province, ending the reprieve brought by several days of rain, the meteorology office said.

Nightclub workers have rallied against a hardline Muslim group that attacked entertainment spots in Indonesia's capital last weekend.

About 700 people, one-third of them female nightclub workers, demonstrated Wednesday in the parking lot of the Jakarta police headquarters.

Damar Harsanto, Jakarta – Police attempts to impress the public on the seriousness of legal action against their own officers alleged to have committed crimes seem doomed to failure as many irregularities were found at an open hearing on Tuesday.

Jim Lobe – A group of Indonesian human rights organizations is urging the United States Congress to maintain tough conditions on renewing US training of the Indonesian military (TNI) even as the administration of President George W. Bush is actively enlisting the TNI in Washington's "war on terrorism."

Bill Guerin – Al-Habib Muhammad Rizieq bin Hussein Syihab, leader of the pro-Suharto radical Muslim group FPI (Defenders of Islam), and his storm troopers may, after two years of apparent immunity from the process of law and order, be about to be brought to account.

Matthew Moore, Jakarta – On the eve of his return home, Australia's ambassador to Indonesia, Ric Smith, has sought to rebut a series of "myths" which he believes are straining the relationship between the two countries.

Devi Asmarani, Jakarta – President Megawati Sukarnoputri has turned up the heat on Attorney-General M.A. Rachman by asking him to resign in the face of allegations of concealing his personal assets from state auditors.

But it is likely to take more than persuasion to make the controversial Attorney-General, who insisted he had done nothing wrong, vacate his coveted post.

Jakarta – Indonesia is increasingly serious about confronting apparent efforts by Al-Qaeda to establish a terrorist beachhead in the world's most populous Muslim nation, the US ambassador to Jakarta said on Tuesday.

Jakarta – A bomb exploded in Indonesia's volatile Ambon city as police tried to defuse it on Wednesday, wounding six people including two police officials.

Residents had found a suspicious package in a market place and called police, a police spokeswoman said.

Muhammad Nafik and Ainur R. Sophiaan, Jakarta/Surabaya – Legal Aid Institutes (LBH) across the country are on the brink of collapse as the once respected non-governmental organization is suffering from financial difficulties following a bitter internal rift.

Devi Asmarani, Jakarta – The Indonesian government and Parliament have agreed on the need to set up a new body to advise the President on defence and international security issues, Chief Security Minister Susilo Bambang Yudhoyono announced yesterday.

Devi Asmarani, Jakarta – Murmurs of discontent within President Megawati Sukarnoputri's Indonesian Democratic Party-Struggle (PDI-P) are growing louder by the day.

Last week, the party was rocked by allegations from within that some of its legislators had been accepting hundreds of thousands of dollars as bribes from various sources in the past three years.

Bambang Nurbianto, Jakarta – The inauguration of Sutiyoso and Fauzi Bowo as, respectively, Jakarta governor and deputy governor for the 2002 to 2007 term took place smoothly on Monday without the demonstrations that had originally been planned by a number of non-governmental organizations.

Indonesian-based Australian journalist John Martinkus explores the fine line between journalism and activism. John Martinkus has at times being accused of being an activist in his reports on the independence movement in East Timor, and more recently the Free Papua Movement (OPM) in the Indonesian province of Papua.

Kafil Yamin, Jakarta – Long stretches of parched paddy fields and vegetable farms lining the road are a testament to the drought that has hit Java and other parts of Indonesia. The arid landscape through Cikarang industrial estate, 60 kilometers south of Jakarta, is dotted with lamb and cattle eating dry grass here and there, the rivers having dried up long ago.