Surabaya has seen two days of protests over war in Iraq

The state department said there was credible information of possible attacks against Americans, following the start of the war in Iraq.

Earlier, Australia advised its citizens not to travel to the country's second largest city of Surabaya, the bustling capital of East Java province.

The Australian government said it believed a group associated with the militant Islamic organisation, Jemaah Islamiyah, was planning an attack there.

Australia says Jemaah Islamiyah is the main suspect in last year's bomb blast in Bali.

The Indonesian police angrily dismissed any threat of attack in Surabaya, where peaceful protests have taken place against the US-led invasion of Iraq.

"Maybe they [Australia] got the information from a Ouija board. It seems they are only looking for trouble," East Java police spokesman Sad Harunantyo told news agency AFP.

In a conversation with the news agency Associated Press, Mr Downer said that he believed the militants to be connected to Jemaah Islamiah, the group formally blamed by Indonesian police for October's Bali bombings, which killed 202.

He said intelligence sources were unclear whether the target of the possible attack would be Westerners or Indonesians.

"But this is a terrorist organization which, as I said, has historically been associated with Jemaah Islamiah and has denounced foreigners and clearly been at least inclined to mount terrorist attacks against foreigners," he reportedly said.

He said his ministry had contacted all the Australians it knew of in Surabaya to warn them of a possible impending attack.

The Australian Foreign Ministry is warning on its website that it "has credible information that terrorist groups with a history of targeting Westerners and Western interests may be planning terrorist activity on or about 23 March in Surabaya".

Troops in Iraq

Those already in the city, the statement says, are advised to "exercise extreme caution, to remain at home wherever possible and to avoid commercial and public places frequented by foreigners" such as bars, restaurants, fast food outlets and so on.

Australia has deployed about 2,000 troops to assist the US-led campaign to unseat Iraqi leader Saddam Hussein, making it a focus of protests.

Eighty-nine Australian nationals were among the 202 people who died in Bali last October.