Illusion of Security.

Indonesia looked to have the upper hand on its terrorists. Authorities basked in international praise for a string of successes. The plotters behind the deadly 2002 Bali bombings had been rounded up and their trials were moving forward. Local police had arrested more than 80 members of Jemaah Islamiah, the Southeast Asia terrorist network linked to Al Qaeda. And in July authorities rolled up two terrorist cells on Java. But accolades are fleeting. Last Tuesday a suicide bomber detonated a van packed full of explosives outside a popular Western hotel in central Jakarta, killing at least 10 people and wounding more than 140, mostly Indonesians. While the blast appears to have finally convinced the public that radical Indonesian Muslims--not the U.S. or Israeli intelligence services--are killing their own people, authorities are pondering a worse reality: Indonesia's terrorism problem is going to get worse before it gets better. "It's crazy," says political analyst Salim Said. "At any time they can launch an attack."

Indonesia, the world's largest Muslim nation, was reminded again last week of the scope of the threat it faces. Police say Jemaah Islamiah likely carried out the bombing at Jakarta's J.W. Marriott Hotel, a popular spot for Western visitors, businesspeople and U.S. Embassy functions. Preliminary forensic evidence has shown the bomb was similar in composition and design to those used in the group's previous attacks, most notably the Bali bombings, which killed 202 people. Intelligence and diplomatic sources say the suicide bomber and two men who bought the minivan used in last week's attack were identified as members of the terrorist outfit within 48 hours of the blast. "Jemaah Islamiah is the only organization in this region capable of carrying out an attack of this size," says terrorism analyst Zachary Abuza.

Indonesian police had an idea that something might be afoot. Early last month they arrested nine people from separate Jemaah Islamiah cells in Semarang, central Java, and Jakarta, finding huge caches of bomb detonators, hundreds of pounds of explosives and weapons, and a list of dozens of potential target areas where hotels, shopping malls and Western entertainment areas are located--although no specific targets were named. NEWSWEEK has also learned that several Indonesian police officials were specifically targeted for assassination, and the Mega Kuningan district--where the Marriott hotel is located--was among the general locales marked for bombings. Authorities publicly lauded the busts at the time, but were privately terrified after the Semarang and Jakarta raids when they realized that 300 kilograms of explosives remained unaccounted for. Some of it has likely already been moved to other terrorist cells in Jakarta, according to diplomatic sources. Indonesian police, however, have been reluctant to release too much information too quickly, apparently out of fear of alienating the country's vocal majority. Says police spokesman Basyir A. Barmawi, "We must be careful because of Muslims' sensitivities."

Jemaah Islamiah, which aims to create a Pan-Islamic ...