Prime Minister Dr Mahathir Mohamad said today that the Bali bomb blast in neighbouring Indonesia was "very unfortunate" and warned that growing Muslim anger worldwide was fanning terrorism.

The level of hatred against the West was higher now than immediately after the Sept 11 attacks on the United States because nothing had been done to address the causes of terrorism, he said.

"Instead we see more things being done to increase the anger of people," he added, in an apparent reference to US threats to attack Iraq.

Mahathir said the Bali bomb blast which killed nearly 200 people, mostly Western tourists, was "planned just to achieve revenge, retaliation."

"I have always suspected it might happen anywhere in the world because at this moment I believe the level of hatred, the level of bitterness, frustration is greater than immediately after Sept 11," he told reporters.