Indonesian authorities have confirmed that one of the five men killed in two separate shoot-outs with police in Bali was connected to a terror cell found training at a paramilitary camp in Aceh two years ago.
The group of five suspected militants were in the final stages of planning heists at locations in Bali heavily frequented by tourists, with the money raised from the robberies to be used to fund terrorist activities.
National police spokesman Saud Usman Nasution confirmed on Monday that the plans for the robberies drawn up by the group had been recovered following raids on two addresses, in Sanur and Denpasar, in Bali on Sunday night.
A number of handguns and ammunition have also been recovered from both addresses.
The leader of the group, a 32-year-old identified only as HN, had been on Indonesia's most wanted list for two years and was believed to be involved in an armed robbery of the CIMB Niaga bank in Medan in North Sumatra in 2010.
Inspector-General Nasution added that HN was also wanted in connection with a terror cell discovered in Aceh in 2010, which had been planning to carry out attacks on Western targets.
"There's definitely a connection," he said.
The Aceh camp was set up by Abu Bakar Bashir, the former spiritual leader of Jemaah Islamiyah and the group blamed for the 2002 Bali bombings.
While Bashir is serving 15 years in prison over his involvement in the Aceh network, a number of members are known to be still at large.
Inspector-General Nasution, the former head of Indonesia's crack anti-terrorism unit Detachment 88, which carried out the raids on Sunday, confirmed that the locations targeted by the group had posed a risk to tourists.
The group had been under surveillance as they scoped out several potential targets - all in areas extremely popular with tourists such as Kuta and Jimbaran - including a moneychanger on Jalan Sriwijaya, Kuta, a jewellery store on Jalan Uluwatu, Jimbaran and a Denpasar Cafe named Lavida Loca.
"The cafe must have a lot of foreigners and the moneychanger, too," Inspector-General Nasution said.
The group was in the final stages of planning the heists when about 100 heavily-armed Detachment 88 officers swooped on Sunday night.
They had been tailing the group for about a month.
Witnesses reported gunshots could be heard for several minutes as officers raided the Lhaksmi Hotel on Jalan Danau Poso in the Sanur area about 9pm local time (midnight AEDT).
"I heard more than 10 shots," one witness, who only wanted to be identified as Egi, told AAP.
Another two men were shot and killed during a raid at an address on Jalan Gunung Soputan in Denpasar, about 15km from the hotel in Sanur.
Bali Police spokesman Hariadi said that a number of firearms were recovered from both addresses.
"They were known to be carrying firearms and when we raided the addresses they fought back. They were shot and killed," Hariadi said on Monday.
Police downplayed earlier speculation that the group may have been planning attacks for Thursday, on the eve of Nyepi, or the annual Day of Silence which marks the Balinese Hindu New Year.
Balinese traditionally hold large parades on the eve of Nyepi, which also draw large numbers of tourists.
Hariadi said no explosives were discovered at either of the locations raided on Sunday and that there had been no threat of bombings.
"There was no plan to carry out bombings in Bali," he said.
However, the latest development is a stark reminder of the lingering threat of terrorism in Indonesia and comes ahead of the 10th anniversary later this year of the 2002 Bali bombings which killed 202 people, including 88 Australians.
The bodies of the five men have been flown to Jakarta where authorities will complete the identification process.
Police said they were still hunting a number of suspects connected to the group who remained on the run in Bali.
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