It was horrendous - total carnage Richard Poore, witness

Local police say bomb squad officers are investigating, although the cause of the explosions has not been confirmed.

The explosion in Kuta occurred at about 2330 local time when the bars would have been packed with tourists.

Witnesses say the blast destroyed the Sari Club and the resulting fire then engulfed a neighbouring bar, Paddy's Irish Club.

Other buildings and several cars were also damaged in the blast and ensuing fire.

One witness, Richard Poore, a cameraman for a New Zealand TV company, said the force of the explosion was so strong it severely damaged his hotel nearly 1km away.

"The windows of the hotel blew out, the upper floors have lost their ceilings and dropped in and there was an incredible amount of smoke in the sky."

Mr Poore explained that his "first instinct was to run up the road with a camera" to film the scenes of devastation.

"I have just never seen anything like it. It was horrendous. Total carnage," he said.

The US embassy in Jakarta has issued a series of warnings in recent weeks that its nationals could be targeted by Islamic militants linked to the al-Qaeda terror group.

The embassy itself closed for several days last month after intelligence reports indicated militant groups were planning car bomb attacks.

Indonesian officials have in the past denied that militants linked to al-Qaeda are active in the country.

Known as the Island of the Gods, Bali is a popular holiday resort - 1.5 million tourists visited in 2001.

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