The daylong siege in a village about 75 miles southeast of the capital underscored the degree to which attacks by majority Buddhists against the Muslim minority in Myanmar, especially those from the Rohingya ethnic group, is reverberating outside Myanmar and especially in Indonesia, the world's most-populous Muslim-majority country with a history of terrorism by a small number of extremists.

WSJ: Terror Suspects Slain in Indonesia

Especially at risk from an outbreak of violence are Indonesia's 2.5 million or so ethnic Chinese, who dominate the merchant class.

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Indonesia had been under pressure to agree to negotiate, especially from America: it is keen to have the world's most populous Muslim nation on its side in the war against terrorism but human-rights abuses in Indonesia have been an obstacle to close military ties between the two countries.

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