Muklis Ali and Dean Yates, Jakarta – Indonesia's president denounced on Friday what she called the "blind fanaticism" of Muslim militants accused of the Bali bombings, describing it as a "terrifying threat".
In rare remarks about Islam and terrorism, Megawati Sukarnoputri told Indonesia's parliament in an annual progress report such a threat had to be cut off at its roots.
She also acknowledged there had been "mistakes and violations" during a fresh military offensive in Aceh, but heaped praise on the soldiers who launched the offensive in May and said they were winning the war in the separatist province.
Referring to the October 12 Bali blasts that killed 202 people, mainly foreigners, Megawati said Indonesia was not only a target of terror, but also home to those behind attacks.
"Like it or not, believe it or not, from the cracking of this terror act we comprehend that our country not only has become a target of international terrorism but also is a source of a part of the plotting, perpetrating and supporting actors," she said.
"The number of people involved in this terror act is not many but their blind fanaticism to an extreme dogma ... has truly made this domestic branch of the international terror movement a terrifying threat." She did not openly name the Southeast Asian militant network Jemaah Islamiah, blamed for the attacks and linked to al Qaeda.
The 700-member People's Consultative Assembly was holding its annual session at the parliament complex. It comprises the 500-seat parliament and 200 additional representatives. SECURITY IMPROVING Megawati said that after five years of crisis, the world's most populous Muslim nation had held together and was making progress in improving security and reviving the economy.
Indonesia recently warned that Jemaah Islamiah, which wants an Islamic state in the region, might be planning more attacks.
The perpetrators of the Bali bombings had mistakenly linked themselves to Islamic teachings, Megawati said. She said Islam and the Indonesian Muslim community in general had no connection to what she called their "acts of terror".
Most Indonesian Muslims are moderate, but until now Megawati has been mostly reluctant to take on militants because she is vulnerable to criticism from conservative Muslim politicians.
Indonesia has arrested 30 militants over the Bali attacks. The first verdict in trials of suspects, that of a man called Amrozi who faces death, will be handed down next Thursday.
Megawati did not detail specific progress in Aceh, but said her decision to declare martial law for six months was taken with a "heavy heart". She did not want this prolonged, she added. "The areas that were controlled by the armed separatist movement are slowly but surely being rehabilitated and put back under under the control of the Aceh government," she said.
Megawati said she had noted calls for more peace talks with the Free Aceh Movement (GAM), but reiterated there would be none until the rebels – whom she accused of committing crimes against humanity – gave up their 27-year fight for independence.
Megawati defended her record after two years in office, accusing critics of reducing Indonesia to an object of ridicule. She has returned political stability to Indonesia although still has many critics who accuse her of doing little to tackle key woes holding back investment such as corruption. During her rule, the rupiah has strengthened and the stock market has risen.
Many political analysts tip her as the favourite to win Indonesia's first direct presidential election next year.
[With reporting by Achmad Sukarsono.]