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The twin hotel bombings in Jakarta on July 17 shocked the business community and represented a setback for the country’s counterterrorism efforts, but did not pose a major challenge to the government of President Susilo Bambang Yudhoyono, according to an International Crisis Group report released on Friday.

“Nothing about the bombing is likely to weaken his government or prompt a crisis,” the report said of Yudhoyono. “The impact on the business community, which lost four prominent members, has been devastating, but economic indicators are stable.”

The Brussels-based group, which monitors conflicts worldwide, said the key to the government’s response would be the quick arrest of those behind the bombings, which it said were likely the work of fugitive Malaysian Noordin M Top and a splinter cell of Jemaah Islamiyah.

The International Crisis Group’s report also called on police to seek out the sources of funding for the operation, saying that if outside sources had provide financing for the attacks it could indicate that future attacks would be more likely.

The group also cautioned against calls for draconian antiterror legislation, which it said could backfire.

“The easiest step and the most unwise would be to turn the antiterrorism law into an internal security act that allowed for lengthy preventive detention.

“Instead, Indonesia needs continued attention to community policing [and] more attention to JI-affiliated schools that offer protection to men like Noordin,” the report said.

The group’s report also rebutted Yudhoyono’s suggestion immediately after the attacks that political opponents of his government may have been trying to foment unrest with the attacks.

“There is no reason to believe that any of the government’s political opponents had links to the bombers,” it said.

The group said the key to making Indonesia safe from terror attacks was to understand the motives of the bombers and to counter radical propaganda emanating from Islamic schools that shelter militants.

“If the police succeed in arresting Noordin Top, it will not mean the terrorist threat is over,” the report said.

“Beyond law enforcement, the government needs to understand why and how fugitives as dangerous as Noordin Top continue to find shelter in Indonesian villages,” it said.  JG