Indonesia has not suffered a major attack for three years, but it is still considered at risk from Islamic militants.

'It is still fresh in our memory, tragedies in Indonesia,' Indonesian Police Chief Bambang Hendarso Danuri told an opening ceremony in Jakarta, noting as well recent militant attacks in Mumbai.

Indonesia is predominantly Muslim, but has large minorities of other religions including Christians and there were a series of bomb attacks on churches on Christmas eve in 2000.

The exercise involving more than 6,500 personnel will be conducted in the waters of the busy Malacca Strait, as well as hotels and transport hubs in major cities and in Bali.

The three-day drill includes a simulation of a hotel siege following the deadly attacks in Mumbai, where hotels were major targets.

TV footage showed heavily armed, balaclava-clad police scaling down the side of a hotel in Bandung in West Java to rescue hostages.

Raids often involving Detachment 88, an anti-terrorism unit funded and trained by the United States and Australia, have led to the arrest of hundreds of militants suspects in Indonesia.

But illustrating the dangers the country still faces, police recently foiled a plan to bomb an oil storage facility in north Jakarta, and in July police found bombs stored in the ceiling of a house in Palembang, Sumatra, and linked the group involved to the regional militant organisation Jemaah Islamiah.

Jemaah Islamiah has been blamed for deadly attacks in recent years in Indonesia, including the 2002 Bali bombings that killed 202 people. -- REUTERS