Published: Friday, 17 Jul 2009 | 2:25 AM ET

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Bomb blasts ripped through the JW Marriott and the Ritz-Carlton hotels in Jakarta's business district on Friday, killing nine people and wounding dozens in attacks that could dent investor confidence in Indonesia.

A car bomb also blew up along a toll road in North Jakarta, police said without giving further details. Indonesia's Metro TV said two people had been killed. An unexploded bomb was also later found at the Marriott, police said.

The apparently coordinated bombings are the first in several years and follow a period in which the government had made progress in tackling security threats from militant Islamic groups, bringing a sense of political stability to Southeast Asia's biggest economy.

Suspicion is likely to fall on remnants of the Jemaah Islamiah group, blamed for previous attacks including a car bombing outside the Marriott in 2003 as well as bombings on the resort island of Bali the previous year that killed 202 people.

"I think the attacks are devastating for the image of security that Indonesia has built up painstakingly over the past four years," said Kevin O'Rourke, a political risk analyst in Jakarta.

"The attack is particularly severe for investor confidence because it took place despite strenuous counter-terrorist efforts by the government and has affected the hotels that are seen to be among the most secure in Jakarta and also either killed or wounded numerous prominent expatriate businesspeople."

Tim Mackay, president director of cement maker PT Holcim Indonesia, was among those killed in the hotel attacks, the company said. Police said nine people had been killed including foreigners. More than 42 people were wounded.

Indonesian financial markets fell after the blasts, with the the rupiah

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[IDR=  Loading...      ()   ] down 0.8 percent at 10,175 per dollar, prompting state banks to sell dollars to support the currency, traders said. Indonesian stocks were down some 2 percent.

Witnesses said the bombings at the Marriott and the Ritz-Carlton were minutes apart. The hotels are near each other in a business area home to many offices, embassies and bars.

Hundreds of police, some soldiers and ambulances were at the scene of the hotel attacks. Scores of foreigners and Indonesian hotel guests milled outside, some still wearing bathrobes.

The windows in the first floor of the Ritz-Carlton were blown out, indicating the blast may have been in the restaurant, which would have been busy with breakfast at the time.

"I fell because of an explosion, I did not know where it came from, but after I saw clearly it came from the left side of the JW Marriott Hotel," said Yanuar, an employee at the Marriott.
     
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The blasts will also be a blow for President Susilo Bambang Yudhoyono, re-elected last week in a crushing election victory that reflected the former general's steady leadership and firm stance on security.

Both the parliamentary elections in April and the presidential poll this month passed peacefully, underscoring the progress made by the world's most populous Muslim nation since the chaos and violence that surrounded the downfall of ex-autocrat Suharto in the late 1990s.

Lydia Ruddy, a witness who lives in the area, said she heard an explosion and saw smoke coming from the Marriott, followed five minutes later by another explosion at the Ritz-Carlton.

A Ritz-Carlton employee said the Manchester United soccer team had been due to stay at the hotel ahead of an exhibition game in Indonesia early next week.

Jemaah Islamiah was blamed for a string of attacks between 2002-2005 in Indonesia. Many militants have since been arrested. But an Australian security report on Thursday said Jemaah Islamiah could be poised to strike again.

Leadership tensions in JI and recent prison releases of JI members raised the possibility that splinter groups might now seek to re-energize the movement through violent attacks, said the report by the Australian Strategic Policy Institute.

The report said JI was now a splintered group which may not be capable of replicating mass casualty attacks, but warned there was evidence that JI members released from prison "are gravitating towards hardline groups who continue to advocate al Qaeda-style attacks against Western targets". "These hardline groups continue to believe that the use of violence against the "enemies of Islam" is justified under any circumstances," said the report.

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