Indonesian security forces were on high alert Sunday, the world's most populous Muslim nation's independence day, after making ten arrests in connection with a deadly bomb attack on a luxury hotel.

Policemen stand guard in front of the presidential palace during Indonesia's Independence Day in Jakarta, August 17, 2003. Indonesian security forces went onto their highest alert level, following this month's bombing of a luxury Jakarta hotel and warnings that more attacks may be planned. [Reuters]

Soldiers in camouflage with assault rifles or machine-guns guarded street corners and the entrances to malls, hotels and government buildings in the capital amid warnings of more attacks by radicals.

"The order for us is 'alert one'. That is the emergency level," national police spokesman Zainuri Lubis told Reuters. "For this independence day, we are securing Jakarta and other provinces in the 'alert one' status."

Australian Prime Minister John Howard said Sunday terror attacks still threatened the region, despite the recent arrest of Southeast Asia's most wanted militant, Hambali, and that Indonesia was the immediate concern.

"Because it is a national day there is thought to be a particular danger," he said on Channel Ten television.

Some 230,000 police were on duty throughout Indonesia, working alongside thousands of soldiers and undercover intelligence agents to foil any possible attacks by militant groups, the police spokesman said.

Security was particularly tight at the presidential palace where President Megawati Sukarnoputri reviewed troops at a special ceremony attended by ministers, foreign diplomats and hundreds of VIP guests.

The celebration comes nearly two weeks after a suicide bomber blew up a car packed with explosives in the courtyard of the U.S. run JW Marriott hotel in central Jakarta.

BLAST SUSPECTS ARRESTED

National police chief General Da'i Bachtiar said authorities had arrested 10 people in connection with the blast. He gave no details, but added: "We are still searching for several people who need to be arrested."

It was the second major bombing in less than a year, following last year's Bali nightclub blasts that killed 202 people, 88 of them Australians.

Australia and New Zealand have warned of possible fresh militant strikes on soft targets, including Jakarta shopping malls and hotels, over the weekend.

Several Western countries, including the United States, have warned their citizens to avoid public places.

Dozens of Jakarta hotels and apartment buildings where foreigners live have bolstered security with armed police guards, barbed wire and sandbag barricades.

Despite the heavy security presence, thousands of Indonesians strolled, picnicked and played games in parks around the capital. Indonesian red and white flags fluttered from lampposts, balconies and the backs of cars and motorcycles.

There have also been fears that any planned militant attacks may be brought forward after the capture in Thailand last week of Hambali, an Indonesian suspected of leading the regional Jemaah Islamiah militant network that police have blamed for the Bali blasts and which has been linked to the Marriott bombing.

Hambali, whose real name is Riduan Isamuddin, was captured in a joint Thai-U.S. operation. Indonesian officials said at the weekend he should be put on trial in Indonesia.

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