Australia will not be cowed by the threats of "fanatics" said to be planning the assassination of Western diplomats in Indonesia, Foreign Minister Alexander Downer said today.

Downer, who is on a two-day visit to Malaysia, was responding to reports that the Al-Qaeda-linked Jemaah Islamiah (JI) terror group had switched tactics from bombings and was now targeting ambassadors from Australia, Britain and the United States.

The Far Eastern Economic Review said British and Australian intelligence organisations had "specific and credible" information that a group of JI operatives, trained to carry out assassinations, had entered Indonesia in recent weeks.

"We know that JI targets Australia and Australians and we take every precaution, (including) cooperation with the Indonesian police and army," Downer told reporters during a visit to the new Southeast Asian Regional Centre for Counter-Terrorism here.

"We have extensive security at our own embassy and we are not going to be threatened by terrorist organisations in this way.

"We are not going to be told what to do and what our policies should be, we will not be cowed or threatened by some fanatics in Jemaah Islamiah."

JI was responsible for the Bali bombing in October 2002 which killed 202 people, many of them Australian tourists.

Downer said the anti-terror centre was "an important illustration of regional cooperation on counter terrorism. It sends a message to all of us that no single country can tackle terrorism alone."

Pre-emptive strike row

The foreign minister played down a row which erupted after Prime Minister John Howard said in December 2002 that he would not hesitate to order a pre-emptive strike on any neighbour found to house terrorists planning an attack against Australia.

The statement produced a furious reaction from Malaysia and also angered the Philippines and Indonesia.

Downer said: "I think this was an amazing media beat-up of spectacular proportions. I think any Malaysian government will take the view that if there was a terrorist organisation planning to attack Malaysia the Malaysian government would do what it could to stop it.

"And if the terrorist attack is being launched from another country it is for the other country to stop it."

Downer's visit is seen as the beginning of a new era in relations between Australia and Malaysia, which were strained under former premier Mahathir Mohamad, who rejected Canberra's attempts to be accepted in Asian political and economic forums.

Prime Minister Abdullah Ahmad Badawi, who took over when Mahathir retired last October, has a less confrontational style and ministers have indicated that he is keen to have good ties with Canberra.

Mend ties

Deputy Prime Minister and Defence Minister Najib Razak said after meeting Downer later that Kuala Lumpur and Canberra were keen to boost bilateral ties despite political differences.

"Our position is that we can have differences on specific issues but it does not mean we cannot improve ties. We are looking into ways we can move forward our bilateral ties for our mutual benefit," he told reporters.

Najib said Australia also expressed a desire to strengthen economic relations and had suggested the two countries sign a free trade agreement.

The Ministry of International Trade and Industry had already launched a study into the issue, he said. - AFP