Australian agents and Special Air Service Regiment troops were cooperating with Filipino soldiers in the hunt for senior terrorist figures in the Philippines, said News Ltd. papers, citing an unnamed former agent with the peak spy agency Australian Security Intelligence Organization.
Last Sunday, Foreign Minister Alexander Downer would neither confirm nor deny the presence of SAS, the shadowy regiment that has spearheaded Australias combat roles in Iraq and Afghanistan.
"Im not going to go into all the details of who they are, but there are Australian personnel in the Philippines who are providing the Philippines police and Armed Forces with assistance," Downer told Melbourne Radio 3AW.
"We do have some people there from... various arms of government helping the Filipinos, and have had for quite some time," he added.
A week after terrorist bombings on the Indonesian island of Bali killed 23 people, including four Australians, attention is focusing on terrorist cells operating in the southern Philippines.
Authorities have so far failed to capture fugitive bomb makers Noordin Mohamed Top and Azahari bin Husin, believed to be the masterminds behind the Bali attacks.
Azahari known as the "Demolition Man" for his knowledge of explosives and "Moneyman" Noordin are believed to be key figures in the Jemaah Islamiyah terror group blamed for the Oct. 1 bombings in Bali.
The two became Southeast Asias most wanted fugitives after allegedly masterminding the 2002 nightclub Bali nightclub bombings that killed 202 people, and the Jakarta suicide attacks in 2003 and 2004, which left 23 more dead.
A top Indonesian anti-terror official, Maj. Gen. Ansyaad Mbai, also has identified the two as the alleged masterminds of the latest bombings.
Indonesian police say the two have eluded capture for years by renting cheap houses in densely populated areas, with nearby back alleys for quick escapes.
Azahari, an Australian-trained engineer, and Noordin were close associates of Jemaah Islamiyahs former operational chief, Riduan Isamuddin.
Isamuddin, an Indonesian better known as Hambali, was captured in Thailand in 2003 and is now in US custody. The two Malaysians are believed to have taken his mantle but this remains unconfirmed.
Azahari, a 48-year-old native of the southern Malaysian state of Johor, studied mechanical engineering at Adelaide University in Australia before getting a doctorate in property valuation from Reading University in the United Kingdom in 1990.
He taught at a Johor university before getting involved with Jemaah Islamiyah. Azahari is known to have received bomb-making training in Mindanao in the southern Philippines in 1999, and advanced training in Afghanistan in 2000.
He fled Malaysia, leaving behind his wife and two children, after police uncovered his Jemaah Islamiyah role during a crackdown after the Sept. 11, 2001, attacks in the United States. Noordin, also from Johor, fled at the same time, and both arrived in Indonesia.
Dubbed "the Demolition Man" by Malaysian media, Azahari is believed to have become a militant firebrand after meeting Jemaah Islamiyah leader Abu Bakar Bashir in the 1980s.
Noordin, 35, is a recruiting whiz who purportedly excels at collecting money for the groups deadly missions. He was reportedly the chief strategist in the Marriott Hotel bombing in Jakarta in 2003, and the September 2004 attack on the Australian Embassy there.
Noordin is suspected of talking militants into becoming suicide bombers, using skills he picked up during stints in the southern Philippines, Indonesian police say.
In July 2004, Azahari and Noordin narrowly escaped a police raid on a rented house west of Jakarta, where forensic experts later found traces of explosives used in the Australian Embassy bombing.
News Ltd. reports said Australian agents also are targeting a bomb maker by the name of Dulmatin, who is thought to be in the Philippines.
Australian media have reported that Australia has been fighting a covert operation in the Philippines for at least a year, helping combat an alarming rise in Islamic fundamentalism and terror.
Philippine officials confirmed in June that a handful of Australian police have been providing forensic expertise, training and intelligence to Filipino counterparts, but said their operations were not covert.