The chief suspect in the Bali bomb inquiry was a student of detained Muslim cleric Abu Bakar Ba'asyir, Indonesian police have said.

Police said the suspect, known only as Amrozi, studied under Mr Ba'asyir when they were living in Malaysia and that they had kept in contact.

According to Amrozi, he and his group wanted to kill as many Americans as possible I Made Mangku Pastika, head of the Bali investigation

It was the first time police suggested formal links between the Bali bombers and Mr Ba'asyir, who police are detaining and waiting to question over bomb attacks in 2000.

Mr Ba'asyir has denied any terrorist involvement and denies being a leader of a radical Muslim group Jemaah Islamiah, which some governments accuse of being involved in the 12 October Bali attack.

Police also said the 10 men suspected of carrying out the Bali bombing were all Indonesians, and that Amrozi had told them his real target was American tourists.

'Many students'

Major-General I Made Mangku Pastika, in charge of the Indonesian investigation into the Bali attack, said Amrozi had taken religious lessons under Mr Ba'asyir in the late 1990s.

"Abu Bakar Ba'asyir is a major preacher who has many students. One of his students is Amrozi," he said.

Mr Pastika said Amrozi had invited Mr Ba'asyir several times to an Islamic school in the East Javan village of Tenggulun, where police detained Amrozi last Tuesday.

Amrozi was arrested last week in East Java

According to the police, Amrozi has already admitted to being the owner of the minivan packed with explosives which blew up outside the Bali nightclub in October, and to having been involved in the attack.

Mr Pastika said Amrozi took part in the attack because he wanted to retaliate for US attacks on Iraq and Afghanistan.

"According to Amrozi, he and his group wanted to kill as many Americans as possible," Mr Pastika said.

"He says America is oppressing Islam," the major-general added. "According to him America attacked Iraq and Afghanistan, and America is not fair in the cases of Palestine and Israel."

Mr Pastika said Amrozi's only regret about the bombing was the fact that most of the dead were Australians rather than Americans.

"He thought many Americans were in Bali. When he knew many Australians died he was not happy. He doesn't regret it but he is just unhappy," Mr Pastika added.

Appeal rejected

In Jakarta on Monday, a court rejected an appeal by Mr Ba'asyir against his continued detention.

Abu Bakar Ba'asyir lost his appeal on Monday

Mr Ba'asyir's legal team argued that the police case against his detention - regarding a series of church bombings in Indonesia on Christmas Eve 2000 - was built entirely on the testimony of one self-confessed member of the al-Qaeda network.

But the prosecution argued that the case rested on far more than that.

More arrests

Indonesian police have arrested two more men in connection with the Bali bombing.

Officers raided a house in Tenggulun early on Monday and seized a former forest ranger known as Komarudin while he was asleep, according to police sources.

Komarudin is thought to have stored weapons and explosives for Amrozi.

The police also said they had arrested a man named Tafsir, who is believed to have been Amrozi's driver.