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YOGYAKARTA, Indonesia, Jan 23 (Reuters) - A militant Indonesian Muslim group said it threatened to kill an envoy sent by Osama bin Laden last year after the emissary made insulting remarks while offering financial aid and other help.

Jafar Umar Thalib, commander of the Laskar Jihad organisation, said the offer of assistance was made when the operative visited the Moluccas islands, scene of three years of fighting between Muslims and Christians, and was rejected.

"(The envoy) spoke about our scholars and insulted them," the 40-year-old Thalib said in an interview on Tuesday at the group's headquarters, where he also lives, on the outskirts of Indonesia's ancient royal capital of Yogyakarta in central Java.

"We gave an ultimatum that he leave the Moluccas immediately or we would kill (him)," Thalib said, adding the approach was made a number of months ago.

Thalib has never denied the envoy made contact with Laskar Jihad, although reports of the nature of the brush-off have been vague.

Thalib insisted Laskar Jihad had no links with bin Laden or his al Qaeda network, reiterating that his group directly opposed them from an ideological point of view.

Indonesia has come under a spotlight due to fears al Qaeda would find it ripe for entry because of its poverty, communal violence, poor law enforcement and the emergence in recent years of a number of small radical Muslim groups such as Laskar Jihad.

NO ARRESTS

Unlike Malaysia and Singapore where authorities have rounded up dozens of militants with suspected links to al Qaeda, security officials in Indonesia, the world's most populous Muslim country, have made no similar arrests.

Most Indonesians have moderate Islamic views compared to Laskar Jihad, which sent fighters to help Muslims in the eastern Moluccas, where equal numbers of Christians and Muslims live.

In the past few years thousands of people have been killed in fighting between the two groups, although clashes have become less frequent in the past year.

Thalib, who has Yemeni heritage, said Laskar Jihad had no links to any groups in Malaysia or Singapore.

He added that the al Qaeda envoy said he was of Saudi descent and offered financial help and training among other things.

Thalib said the approach was made a number of months ago. Other reports have said it occured in mid-2001 and was rejected because of differences in Islamic interpretations between the two organisations.

One of the envoy's insults was that Laskar Jihad religious scholars were under the influence of Saudi authorities, inflaming the militants from Indonesia's best known radical group.

Speaking inside a garage attached to his modest home that has been converted into a library of Islamic books, Thalib laughed at reports Laskar Jihad was suspected of being linked with al Qaeda.

"That conclusion is very naive," he said, adding Laskar Jihad would reject any future offers of financial help from al Qaeda.

Asked about suggestions foreigners such as Pakistanis or Arabs had joined Laskar Jihad in the Moluccas and Poso, a town in Central Sulawesi province that has been riven by fighting along religious lines, Thalib said: "Maybe they are with other groups. Until now there are no foreigners with us."

He added that he had no details on whether foreigners had trained at a camp near Poso, as some reports have suggested.

Thalib said he knew of no other al Qaeda attempts to get involved with radical Indonesian Muslim groups, which analysts say are mainly focused on local issues, such as seeking implementation of Islamic Shariah law.

He said security forces often visited him and liked to ask about when he met bin Laden in 1987 in Pakistan. Thalib said he was not impressed with bin Laden then or since that encounter.

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