Indonesia is on high alert for a terrorist attack ahead of commemorations for the 10th anniversary of the Bali bombings that killed 202 people.

"Based on credible information, the terrorists have planned to target the Bali bombing commemoration event with a terror attack," Bali's 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 added.

Australia's spy agency ASIO (Australian Security Intelligence Organization), meantime, said terrorism remained a "real and persistent" threat a decade on from the nation's deadliest terror attack, carried out by the Al Qaeda-linked group Jemaah Islamiyah.

The coordinated attacks on two nighclubs on the popular resort island killed 88 Australians.

ASIO chief David Irvine said Islamists motivated by violent jihadist ideology were still targeting Australia and Australians visiting Indonesia.

"A decade on, while Australia is undeniably one of the safe countries in the world, the unfortunate reality is that the threat of terrorism remains real and persistent and therefore represents the greatest focus of ASIO's attention," Irvine said in ASIO's latest annual report, cited by London's Daily Telegraph.

Despite the threat, Australian Prime Minister Julia Gillard reaffirmed her commitment to attend Friday's service in Bali.

According to the Associated Press, the service will be held at a park followed by a ground-zero memorial in Kuta Beach.

Survivors of the bombings, as well as victims' families, are also expected to attend.

Police officials said among the "extraordinary security measures" following the terror threat more than 1,000 security personnel — including snipers and intelligence agents — would be deployed during the ceremony.

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