Indonesia declared its highest security alert Wednesday, saying there was "credible information" of a threat against a ceremony Friday marking the 10th anniversary of the Bali bombings.
Australian Prime Minister Julia Gillard will attend Friday's service in Bali for the 202 people killed in the October 12, 2002, suicide attacks against two packed nightspots.
"Based on credible information, the terrorists have planned to target the Bali bombing commemoration event with a terror attack," Bali deputy police chief I Ketut Untung Yoga Ana told AFP.
"Security at all entry points to Bali, such as airports and seaports will be intensified," he said, adding that security was at "the highest level".
"We are taking extraordinary security measures following this threat," he said, adding that small ports across the island will also be monitored.
At a briefing earlier Wednesday the police official said more than 1,000 security personnel -- including snipers and intelligence agents -- will protect the ceremony.
Gillard is due to give an address to commemorate the 88 Australians who were among the victims of the strike against the Sari Club and Paddy's Bar in the tourist island's nightlife strip of Kuta.
The nation's deadliest terror attack, carried out by the Al-Qaeda-linked group Jemaah Islamiyah (JI), plunged Indonesia into the war on militancy and battered Bali's tourist-reliant economy.