BALI, Indonesia - Indonesian investigators searching for links between the Bali bomb blasts and the al Qaeda network were interrogating two Indonesians Tuesday, and had found traces of plastic explosives.

As anguished relatives sought to identify loved ones killed in Saturday night's explosions there were signs Islamic extremists in Indonesia were on the defensive, even though Jakarta has not yet cracked down on them.

The Laskar Jihad, the most prominent face of militant Islam in Indonesia, said it had disbanded and would withdraw its militia forces from the Moluccas islands where they have fought in a vicious conflict with indigenous Christians.

No group has claimed responsibility for the Bali blasts, but national police chief Da'i Bachtiar told reporters: "We are interrogating two people intensively," adding both were Indonesians. "One said he was present when the incident occurred."

He said the other person was related to someone whose identification card had been found at the blast site but who had not been located. He gave no further details.

Elsewhere in the region, Thailand beefed up security at its beach resorts amid fears bombers who killed 181 people - most of them foreigners on Kuta Beach - could strike again.

And the Philippines called for a regional coalition against the radical Islamic group Jemaah Islamiah, which has been linked to al Qaeda, and which Asian neighbors fear is using Indonesia as a base of operations.

Australia said it would press for Jemaah Islamiah to be put on the U.N. list of terrorist organizations.

FLOWERS FROM AUSTRALIA

Indonesia Monday for the first time linked Osama bin Laden's al Qaeda network to the Bali explosions, and U.S. President George Bush said he also saw in them the handiwork of the group held responsible for the September 11 attacks on New York and Washington.

In Bali, an ashen-faced Australian Foreign Minister Alexander Downer and Justice Minister Chris Ellison walked past the mangled wreckage of the Sari Club, which took the brunt of the explosion along a strip of bars and discotheques.

Downer carried a large bouquet of flowers and Ellison a traditional Balinese wreath.

Australians account for the largest single group of victims, with 22 confirmed dead and 160 missing. Up to 30 Britains are feared killed.

Tuesday Australia sent five refrigeration units to the resort island to preserve the decomposing bodies now lying in hospital morgues.

Bachtiar also said investigators in Bali had questioned a witness at Paddy's bar, situated across the road from the Sari, who saw a man placing a white plastic bag at the scene.

"When he walked up to the man, he ran away and afterwards the place exploded," Bachtiar said.

Police and witnesses have described a small blast at Paddy's followed by a much larger explosion, possibly a car bomb, outside Sari's. Bachtiar said the larger blast appeared to have been caused by C-4 plastic explosives, suggesting a relatively sophisticated device.

A U.S. intelligence official told Reuters the bombings pointed to a sophisticated terrorist group because of the large amount of high explosives used and the coordinated attacks.

Conflicting information emerged about a group of 10 Pakistanis.

Some police reports said the group, apparently licensed to conduct religious activities on Bali, had been held for questioning after the blasts. Others said they had been quizzed before the explosions and were now being more closely monitored. It was not even clear whether the 10 were still on Bali.

None of the reports indicated any evidence the group was connected to the atrocity.

LASKAR JIHAD DISBANDS

Agents from the U.S. Federal Bureau of Investigation and Australian federal police are helping search for clues. Officers from Britain's Scotland Yard are expected to join them along with others from Japan and Germany.

U.S. President George Bush said the blasts appeared to be part of a new global pattern of attacks that he vowed to stop.

British Prime Minister Tony Blair vowed to fight terror on two fronts, dismissing suggestions the murderous blasts in Bali meant al Qaeda extremists had replaced Iraq's Saddam Hussein as public enemy number one.

"I reject that entirely," he said.

As the United States began the evacuation of some embassy staff from Indonesia, Jakarta sought to deflect criticism from the United States and Asian neighbors about its slow response to the threat of terrorism by showing new resolve.

Diplomats were watching for any moves against Jemaah Islamiah. Southeast Asian nations have rounded up scores of its members and warned others have gone to ground in Indonesia.

A key leader of Jemaah Islamiah has been identified as militant Muslim cleric Abu Bakar Bashir, who runs a religious school on Java island to the west of Bali. Bashir denies any terrorist links or knowledge of Jemaah Islamiah and has blamed what he called the "brutal act" on the United States.

The leader of Indonesia's high profile militant group Laskar Jihad said his organization had disbanded.

Jafar Umar Thalib denied the move was linked to the Bali bombings. He said the group made the decision to close and bring home its fighters from the Moluccas islands on October 7, days before the Bali explosions.

Nevertheless, Laskar Jihad is struggling. Thalib is currently on trial for inciting violence, and there are reports his group, which analysts say is sponsored by segments of the armed forces, is now running short of cash.

Laskar Jihad sent thousands of fighters to the Moluccas in mid-2000 to help Muslims fight Christians during bouts of communal violence. Critics have said its continued existence was another sign of the authorities' lax stance toward terrorism.

In Bali, distraught relatives waited in a morgue to identify loved ones. Indonesian and Australian officials said relatives will find it difficult to identify the badly charred bodies.

"There may still be more bodies which, and I'm sorry to put it as crudely as this, but who were very close to where the bomb went off and the bodies have disintegrated," Downer told reporters.

A large number of Indonesians were among the dead, many of whom have not been identified. Among the dead and more than 300 wounded were Americans, Swedes, Swiss and Dutch.

"This will be a long and hard process. We are in for a long and hard time," said Australian embassy spokesman Kirk Coningham.

An Indonesian official said dental records and DNA techniques would be required to identified most bodies.