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.

Foreign investigators

The same source also said that several investigators, including foreigners, were already in Surakarta.

Among the foreign investigators already here are from the US Federal Bureau of Investigation (FBI), the Australian Federal Police and Britain's Scotland Yard as well as Germany and Japan.

The Koran Tempo newspaper on Wednesday cited information from unnamed police and intelligence sources as saying that seven Indonesians under the leadership of someone from the Middle East carried out the bombing but that all had since left Bali.

Another local daily, the Media Indonesia, said today that police a day earlier flew four people to Jakarta for more intensive questioning at the national police headquarters. The identity of the four were not divulged.

National Police Spokesman Brigadier General Saleh Saaf has said that four Indonesians will be formally arrested as suspects over the Bali carnage.

The four, all residents of Bali but not ethnic Balinese, had been under intensive police questioning on the island, he said, adding that arrest warrants will be issued against them.

Plan to maximise death toll

The bombing was carefully planned to maximise the death toll, a source close to the investigations had told AFP.

The source said the bombers used a combination of powerful C4 plastic explosive and gas cylinders in an attempt to kill as many people as possible. And just before the main blast the attackers detonated a small bomb to bring people out into the street.

Police have said that the explosion, in which terrorist mastermind Osama bin Laden's al-Qaeda movement is suspected of involvement, was caused by a car bomb.

The Koran Tempo paper, citing police and intelligence sources, has reported that two vans were used to stage the attack, with the bombers possibly using remote control devices to blow up the Kuta bars frequented by foreigners.

Meanwhile, the authorities have released an Indonesian ex-airforce officer questioned over the blast, local reports said. The Washington Post newspaper had reported earlier that a former airforce officer had admitted building the fatal bomb.

The retired officer's quick release from police custody should provide enough evidence that the air force was not involved in the attack, Indonesian Air Force spokesman Edy Hardjoko was quoted saying.

Saturday's blast ripped through the packed Sari Club and the Padi bar across the road and caused a fire that blazed for hours and gutted the area.