Long considered Indonesia's safe haven, Bali has always been the country's premier tourist destination—a world apart from the spells of violence that plague the surrounding islands. The explosions that rocked the Hindu island moments before midnight Saturday did more than kill dozens and injure scores of innocent barhoppers, tourists and natives—they serve as a reminder that terrorists are not only present but active throughout the country. The two bombs—one placed on Kuta's busiest nightlife thoroughfare and the other in Denpasar near the U.S. consulate—seemed targeted at foreigners.

As rescue workers made their way into Kuta's destroyed Sari Club, the popular watering hole for vacationing Westerners that was the epicenter of one blast, the full extent of the wreckage and casualties were just coming clear; initial reports put the death toll at 3, then 15, then 28, then 50 and then 182. On the scene, shaken witnesses blurted out fragmentary descriptions: the crumpled remains of eight surrounding buildings, four charred bodies in a parked car, the mangled heaps of two vehicles that were flung 10 meters by the blast.

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The explosion was clearly timed to mow down as many foreigners as possible. Kuta is the nightlife capital of Bali, and Jalan Legian is its main drag. Rows of bars, their street fronts open to Bali's warm night air, form a bustling pub crawl route for legions of backpackers, surfers and Australian tourists. And around 11pm, when the bomb exploded, would have been the street's peak hour. Hundreds of revelers and street vendors shilling Balinese handicrafts fill the avenue at night. Sari Club, says a local, was one of the more exclusive: it only admitted Westerners; locals weren't allowed.

The bomb was planted on the sidewalk in front of the Sari Club and tore a three-meter-deep crater in the street. Some fifteen vehicles were damaged. Another bar two doors down called Paddy's was also busy at the time and witnesses say there must be bodies inside that club as well. On the scene the thick smoke billows from the smouldering rubble, and rescue workers cover their noses to the smell of burning corpses.

A young Australian barely made it out of the Sari Club alive. Reese Schouse, dressed in a green short sleeved collared shirt and khaki shorts, had been drinking beers inside with three friends. The Aussies, all in their early twenties, were in Bali from Adelaide to play a rugby exhibition match. Inside Sari Club, Schouse remembers hearing two blasts. At the first, most people in the club grabbed their ears and ducked. But then came a second, much stronger explosion that blew flames through the open front entrance to the bar. Schouse and at least twelve other people found a hole in the rubble and managed to get out of the bar just before the roof collapsed. "I'm going to board the first flight to Australia tomorrow," he said, standing down the street from the smoking rubble.

On the scene, senior commissioner of Kuta police, Hermin Hidayat, said the local security forces are on the move. "We have activated the whole police force of Bali. All military troops in the area have been put on alert."

It's not the high season in Bali, but, according to a Kuta hotel employee named Ketut, this October has been unusually busy. There has never been an attack like this in Bali, he explains. There have been rare tribal disputes in the past, but nobody has ever targeted foreigners. A tragedy like this, explains Ketut, will be devastating for the tourism industry in Bali and the rest of Indonesia. "We are going into bankrupcy," said Ketut. For Indonesian President Megawati Sukarnoputri, already facing criticism for not pulling her weight in the war on terror, the attacks reveal the horrible human cost of delaying a crackdown on domestic terrorism.

—Reported by Wayan Juniartha/Kuta