Sydney  - Islamic militant Noordin Mohammed Top, reportedly killed in a shootout with anti-terrorism police in Indonesia on Saturday, was "one of the most dangerous terrorists in the region," according to an Australian official.

"We are in close touch with Indonesian authorities," a Foreign Affairs spokesman in Canberra said. "His outrages have cost countless innocent people their lives, including many Australians."

Indonesian police believe Noordin was the mastermind of bomb attacks on two Jakarta hotels last month, which killed nine people including two suicide bombers. Three Australians were among the dead.

He is believed to be among those killed in a raid on a house in a remote village in Temanggung district, Central Java.

Police and up to four militants had been engaged in an armed stand-off since Friday evening.

Reports from Indonesia say police hunting Noordin raided two houses on Saturday, killing two suspected militants, arresting five others and seizing explosives and a car bomb.

Noordin, who has been on the run for years, is suspected of involvement in bombing the Marriott hotel in 2003. He is also believed to be behind the bombing at the Australian embassy in 2004 and the second Bali bombings in 2005.

"We stand shoulder to shoulder with the government and people of Indonesia to reject the appalling violence of extremists," the foreign affairs spokesman said. (dpa)