Indonesia's anti-terrorist police Detachment 88 made 11 arrests last week, alleging the group is a terrorist outfit that was planning to plant explosives in and around the embassies.
But The Jakarta Post reported a "leader" of Hasmi -- the shortened name for Haraqah Sunni for Indonesian Society -- said the organization is an educational religious society only.
"Hasmi is a non-violent organization and we focus on preaching," Adi Mulyadi, a leader of the group, told the Post.
"We don't know yet whether the suspected terrorists are our members or not. All I know is that the group will immediately expel any members who practice violence," Adi said.
Last week police raided houses in Jakarta, Bogor, Madiun and Surakarta (Solo) on Java and reportedly found bombs, detonators and ammunition.
National Police spokesman Inspector General Suhardi Alius said the bombs were intended to be detonated in Jakarta at the U.S. and Australian embassies, the U.S. Consulate in Surabaya, eastern Java, and the headquarters of the National Police Mobile Brigade in Semarang, central Java.
"The Hasmi group is a new group and we are still investigating its link with the old groups," Alius, said.
Also targeted was the Jakarta headquarters of PT Freeport Indonesia, a subsidiary of global mining giant Freeport-McMoRan Copper and Gold Inc., which has headquarters in Phoenix.
Freeport owns 90 percent of one of the largest open pit gold and copper sites, the Grasberg Mine in the restive province of Papua on the island of Papua.
The western half of the rugged and forested island has the two Indonesian provinces of Papua and West Papua. The eastern half is the country of Papua New Guinea.
The Grasberg mine, which employees upward of 19,000 people, has been hit by strikes as well as violence aimed at managers.
In October, the mine's owners said they could no longer guarantee supplies because of a strike by workers, believed to be led by the separatist Free Papua Movement.
Papua and West Papua -- together about the size of Spain -- are the poorest regions in Indonesia but extremely rich in natural resources. Separatist Papuan leaders claim few of the region's population get a fair share of the wealth when the resources are exploited, often by international companies,
In August police in the Papua provincial capital Jayapura arrested four suspected separatist rebels after a senior police officer was killed.
Brig. Yohan Kasimatau was shot while washing a police car at the end of an airstrip in Paniai.
Police said they suspect the separatist Free Papua Movement Organization led by Jhon Yogi was responsible for killing, reported Indonesian national news agency Antara.
Security has been tight in the country since commemorations Oct. 12 of the 10th anniversary of the Bali resort bombings and which were attended by Australian Prime Minister Julia Gillard.
The more than 200 dead were from 21 countries, including 88 Australians, 38 Indonesians and 28 Britons.
In June a court in Jakarta has handed down a 20-year jail sentence to a man accused of helping to make the bombs used in Bali.
Hisyam bin Ali Zein, also known as Umar Patek, helped mix chemicals for making the bombs planted at Paddy's Bar and the Sari Club in the resort of Kuta.
Pakistani authorities arrested Patek in January 2011 in Abbottabad -- near where U.S. Navy SEALs killed Osama bin Laden -- and extradited him to Indonesia in August.
The 20-year sentence for Patek -- a member of the banned terrorist group Jemaah Islamiyah and also wanted by the United States and the Philippines -- was less than the life-in-prison demanded by prosecutors, a report by Antara said at the time.