More than 250 people have been killed in the worst outbreak of religious violence this year in Indonesia's troubled Moluccan Islands.

The deaths occurred when Christians and Muslims clashed in the town of Tobelo on the island of Halmahera, following similar violence on the central island of Ambon, where more than 60 people have died in the past week.

The incident, which began late on Monday, appeared to have been sparked by reports of the burning of a protestant church in Ambon, 600km (377 miles) south of Halmahera.

Thousands of Christians, who dominate the area, went on a rampage in Tobelo and surrounding villages, burning houses, businesses and Muslim places of worship.

The clashes - in which home-made guns and bombs were used - lasted two days, leaving 255 people dead and more than 200 injured.

The head of the military station in Tobelo, Captain Made Parsim, told the French news agency AFP that some 12,000 people - Muslims and Christians - had sought safety and refuge at a local army barracks.

He said that several houses were still burning in the town, but "there is no longer the sound of gunshots or explosives".

Captain Danny Momole of the Tobelo police confirmed that "the situation is now under control, although tension remains high".

Worst violence so far

The BBC's Richard Galpin in Jakarta says it is the worst incident in a year of violence in the region.

Seven people reportedly died in clashes on the island of Tidore on Wednesday.

More than 2,000 Indonesian troops are trying to restore peace on the islands. Extra troops have been sent to Halmahera.

However, Indonesian President Abdurrahman Wahid has ruled out imposing martial law on the islands.

He admitted the situation was out of control, but insisted martial law would not be the right answer.

In addition to the fighting in Halmahera and Ambon, reports say seven people died in clashes on the island of Tidore on Wednesday.

More than 1,000 people are thought to have died in the Moluccas since last January.