JAKARTA - At least 182 people were killed and some 300 injured in an explosion Saturday night that investigators say may have been a terrorist attack on Indonesia's resort island of Bali.

Explosion comes on 2nd anniversary of attack on USS Cole

No one has claimed responsibility for the car bomb attack, but there is suspicion it may be linked to Osama bin Laden and al-Qaida. U.S. officials say there are al-Qaida cells in Indonesia.

The attack happened on the second anniversary of the attack against USS Cole off Yemen that killed 17 U.S. sailors. "We are very much considering this a despicable act of terrorism," U.S. Ambassador to Indonesia Ralph Boyce said on Sunday.

More than half the dead were foreigners, including tourists from Australia, Britain, France, Germany, Sweden and New Zealand.

At least two of the injured are Canadian, according to officials in Ottawa, although their identity and condition were not released. Their injuries are believed to be minor.

The explosion outside the Sari Club at the Kuta Beach resort was so powerful it damaged several other buildings on the block.

A second bomb exploded less than 50 metres from the U.S. consulate in the city of Denpasar, the capital of Bali. No one was hurt in that blast.

Investigators said they don't know who carried out the attacks, which they said may have been acts of terrorism.

"If you look at the number of victims, this was indiscriminate and there is indeed a possibility this was terrorism," said Indonesia's national police chief Gen. Da'i Bachtiar.

"This is the worst act of terror in Indonesia's history," he told reporters at Jakarta's airport Sunday before leaving for Bali. "We have to be more alert for other acts of terror."

Washington has expressed concern in the past about Osama bin Laden's al-Qaeda network operating out of bases in Indonesia.

On Thursday, the U.S. State Department issued a worldwide caution to Americans overseas that extremist groups may be planning attacks against American interests.

The warning said such groups do not distinguish between official and civilian targets

Written by CBC News Online staff