Investigators searching for links between the Bali bomb blasts and the al-Qaeda network are interrogating two Indonesians.
They had also found traces of C-4 plastic explosives at the site of the weekend explosion that killed more than 180 people in a strip of bars packed with young foreigners on Kuta Beach, the national police chief said.
Yesterday, Indonesia linked Osama bin Laden's al-Qaeda network to the explosions for the first time, and US President George W. Bush said he also suspected the group.
"We are interrogating two people intensively, police chief Mr Da'i Bachtiar told reporters, adding that both were Indonesians. "One said he was present when the incident occurred".
He said the other person was related to someone whose identification card had been found at the blast site but who had not been found.
Australians account for the largest single group of victims, with 30 confirmed dead and 160 missing. Australia has sent five refrigeration units to the resort island to preserve the decomposing bodies now lying in hospital morgues.
Agents from the US Federal Bureau of Investigation and Australian federal police are helping search for clues. Officers from Britain's Scotland Yard are expected to join them along with others from Japan and Germany.
A US intelligence official said the bombings pointed to a "sophisticated" terrorist group because of the large amount of high explosives used and the coordinated attacks.
In Australia, Prime Minister Mr John Howard said Canberra was pushing to have a Southeast Asian Muslim group, Jemaah Islamiah, included on a UN terror list.