KUTA, Indonesia - Seven foreigners, led by a Yemeni and Malaysian, masterminded and carried out the Bali bombing, reports said today as police prepared to arrest four Indonesian suspects.

The foreign group, which entered the country through Semarang, the main city in Central Java on Oct 10, also included a European and two with links to a series of bombings in the Philippines, the Jakarta Post newspaper said.

The paper, citing a "top level" intelligence source, said the terrorist cell was led by a Yemeni and his Malaysian deputy.

The group is believed to have prepared the explosives in Semarang before using them to blow up the two bars filled with foreign tourists at the busy Kuta district on Bali island on Saturday, the source said.

The Jakarta Post added that among the clues obtained by the intelligence services were telephone calls made to the Middle East from a house in Surakarta and another Central Java city some 80 kilometers southeast of Semarang.

Surakarta is one of the main bases of hardline Muslim groups which had in the past threatened to go after US tourists in local hotels following US strikes on Afghanistan last year.

The city is also near the Ngruki Muslim boarding school led by Abu Bakar Bashir, believed to be the spiritual leader of the Jemaah Islamiah in Malaysia and Singapore which has been accused by both countries of planning violence in the region.