Asylum seekers 'torch ship'

A fuel drum exploded in the boat's hold

Two women have died after a boat carrying more than 160 asylum seekers caught fire and sank near Australia's remote Ashmore Reef.

Navy officials said the fire in the hold of the Indonesian vessel Sumbar Lastari appeared to have been deliberately started after the crew were told to turn around and return to Indonesia.

Officers from the HMAS Woolongong launched a rescue operation but panic broke out when a fuel drum in the boat's hold exploded.

The incident comes on the eve of Australia's general election which has been dominated by the government's popular, hardline policy of preventing boat people from landing on Australian territory

The victims, both wearing lifejackets, were pulled from the water unconscious but resuscitation attempts failed. Both women are believed to have drowned. One woman was thought to be in her 70s, the other in her mid-40s. Their nationality was unknown

More than 30 children were among those rescued.

Intimidation

Prime Minister John Howard said asylum seekers and people smugglers used tactics to try to intimidate the authorities.

"They know we will rescue them," he said in a radio interview.

Ministers said asylum seekers on this boat threw children into the sea

"People smugglers are now saying 'As soon as you get inside Australian territory make sure the vessel is disabled so it can't be sent back.'"

Mr Howard said he would release the official report of the incident to avoid accusations of manipulating the facts for political gain.

Mr Howard and other senior ministers have come under fire over another incident last month in which they claimed refugees had thrown children into the sea to prevent the navy from turning their boat around.

The long-awaited release on Thursday of a navy video of the incident proved inconclusive although it did not show anybody being thrown overboard.

Hardline policy

Australia hardened its policy on asylum seekers after a standoff in late August involving more than 400 mainly Afghan refugees rescued from their sinking vessel by a Norwegian freighter.

Australia has refused to accept boat people

Since then, several thousand would-be refugees have attempted the dangerous crossing from Indonesia seeking to land on one of Australia's remote islands.

Some boats have been forced back but the majority have eventually been picked up by the navy. Most of them have been transported to Pacific island nations for processing.

The policy is largely supported by the opposition Labor Party but critics say it is inhumane and in breach of Australia's international obligations.

Correspondents say about 5,000 asylum seekers try to enter Australia illegally each year - a small number by international standards but a big increase on the few hundred about five years ago.