In reply to:
I was under the impression that Indonesia and Australia didn't get along very well. Weren't they on the brink of a conflict earlier this year (or was it last year)? I was surprised to hear about the number dead though (we have an office in Brisbane we work closely with).
Indonesia and Australia, have not got along very well for some time. They've never threatened war or anything, but things get tense diplomatically on a semi-regular basis.
The basic problems until a few years ago were the issues of Human rights abuses by the then Suharto government.
When the Suharto regime was toppled in 1998 - partly due to the economic flow on from the 1997 Asian currency crisis.
Then the issue of Independance for East Timor set things on edge again.
East Timor was "completely trashed" by Indonesian sponsored/supported "terrorists" (so-called militias) immediately following East Timors resounding vote for independence from Indonesia in 1999 - the militias came form Indonesia into East Timor, they threatened all the East Timorise in the lead up the to referendum (with the (then) Indonesian police either actively enocuraging this intimidation, or turning a blind eye to it), and then when the independance vote was held and they voted yes for independance soemthing like 98% of the votes were "yes") , then the militias took umbrige and took what wasn't tied down, what was not moveable they burned/destroyed.
Even now New Zealand and Australia are in East Timor on peacekeeping duties - effectively policing the semi-porous land border between East Timor and the rest of Indonesia and will be for some years to come.
Indonesia basically has in the past, and still now, refuses to "police" its army properly, so they run riot all over the place and are a law unto themselves - this is a basic problem that indonesia needs to address sooner than later.
Then when East Timor was settling, down, there have been Australian and New Zealand peacekeepers killed by militias invading from Indonesia - which doesn't help things settle down.
Then in late 1999 early 2000 came the rise of the "people smuggling" - so called "refugees" who are smuggled across the sea from Indonesia by people smugglers, whose sole driving force is greed - they charge up to $10,000USD per person, they buy rundown old fishing boats, and then overload these ramshackle boats with passengers, then sail these into Australian territorial waters [takes a few days to steam from Indonesian territorial waters into International waters before they arrive in Australian waters], then the Indonesian "crew" would disable the engines and depart via a pick up boat in the night - having first disabled the boats engines, radio etc and they then leave the passengers at the mercy of the waves, the sharks, the weather. Maybe if the passengers are lucky, the Australian coast guard will intercept the boat before it falls apart - and the occupants can then apply for refugee status.
Im many cases the boats fall apart without anyone being around to rescue them.
More recently the people smugglers would leave the refugees on islands inside Australian territorial waters and then hastily depart back to Indonesia - leaving these people to be "rescued" - if they were lucky, but the Australian authorities.
Australia raised this issue with the Indonesian authorities - again and again - to no avail - would be refugees are in every southern port in Indonesia, waiting to hook up with people smugglers for what they hope will be a short boat trip and better life in Australia.
While the Indonesian police often know who the people smugglers are, they do not do anything about them - nor about the refugees - most are "legally" in the country on false passports from countries Indonesia requires no visas from.
In response to this, for some time now - the Australian government has a policy of mandatory detention in "prison camps" of all refugees - whether they arrive on planes or boats.
the conditions in these camps, is probably pretty bad, and the "refugees" are forced to spend many years in these camps until their case is decided - usually (something like 97% of cases) the decision is that the refugee is not a genuine refugee and the "refugee" is then deported back to wherever they came from - having wasted many years locked up in a "prison camp".
All of this was before September 11 2001.
then in August 2001, following the "Tampa" incident - in which a container ship (the Tampa) picked up in International waters 450+ (mostly Afghan) refugees from a people smuggling boat that was breaking up in International waters - the people were at risk of drowning. Australia refused to let the captain of the "Tampa" "land his catch" of these refugees anywhere in Australian waters/territories. There was a stand off in which the captain of the Tampa refused to leave until the Australians took the people - this went on for some time - about 40+ days as I recall, meanwhile Sept 11 happened.
The solution was to offload the refugees in international waters from the Tampa onto Australian troop carrying ships, then for these ships to travel to Papua New Guinea where the refugees where processed and sent to various countries within the Pacific while their cases where processed.
The whole point of not letting them near Australian waters was that they cannot apply for refugee status in Australia, as they are technically and legally not Australias responsibility if they never touch Australian waters/land.
Following this incident, the Australians changed their laws so that only the Australian "mainland" is considered sovereign territory for Immigration purposes - this means that refugees that make it to one of the many islands in Australian territorial waters cannot claim refugee status. I'm not sure what happens to them - I think Australia has camps setup on these islands as well.
Meanwhile Indonesia continues to wash its hands of the refugee problem - it seems that Indonesia believes it has no responsibility either for the refugees that are using it as a transit point to Australia. Even though most of the so-called refugees are from Muslim countries, and would probably fit into Indonesian society quite well as Indonesia is also mostly Muslim.
So, you can see why the latest incident [the Bali Bombing] has got the Australians pretty riled up. I don't think that Indonesia and Australia are going to best of mates anytime soon.