A group led by Southeast Asia's most wanted terror suspect may have been planning coordinated attacks on a weekend summit of Muslim nations in Bali and a Buddhist festival in Central Java, Indonesia's police chief said today.

National police chief Sutanto said the assumption was based on confessions from a terror suspect named Mustaqfirin following a siege of a house used by followers of top Malaysian-born militant Noordin Mohammad Top in Central Java last month.

Mustaqfirin was among two people arrested in the raid, which also killed two of Noordin's top aides, Abdul Hadi and Jabir.

Noordin, believed to be responsible for masterminding a series of deadly terror attacks including the 2002 Bali bombing, frequented the house but was not present during the raid.

Sutanto said Mustaqfirin had prepared 2kg of explosives.

Actively surveying

Before his arrest he had also been "actively" surveying the ancient Borobudur temple where the Buddhist festival was to be held.

"Perhaps, quite possibly, (his activities) are directed towards the D-8 (summit), which was held yesterday in Bali and the Vesak activities at Borobudur temple," Sutanto told lawmakers during a parliamentary hearing in Jakarta.

The Developing 8 (D-8) summit of eight large Muslim countries was held for one day on the restort island of Bali on Saturday and attended by several foreign head of states. There was also a series of ministerial-level talks two days before the summit opened.

Thousands of Buddhist from across the country flocked to the night time Vesak festival at Borobudur on Saturday.

According to Sutanto, Mustaqfirin had admitted robbing a handphone kiosk and a jewelry store in two Central Java towns together with Abdul Hadi - who died in the raid - to finance their group's cause.

Key and trusted member

National deputy police spokesman Anton Bahrul Alam told AFP separately that police hoped to obtain "more useful information" from Mustaqfirin since he was "a key and trusted member" of Noordin's group.

Noordin was believed to have been a top recruiter for the Al-Qaeda-linked Jemaah Islamiah (JI) regional extremist network but analysts believe both he and his now-dead main accomplice Azahari Husin may have split off to form an even more radical group.

He most recently evaded capture by police last November, days after Azahari was killed in a hail of gunfire by police at his East Java hideout in Batu.