To the Hindu people of Bali, commemorating the dead on the first anniversary last year's nightclub bombings is totally at odds with their belief in reincarnation.

But Balinese across this sun-drenched Indonesian island have put that aside to welcome and help the hundreds of survivors and victims' families flying in from Australia and elsewhere for Sunday's memorial services.

The bombs, planted by Muslim radicals, devastated two nightclubs, killing 202 people from 20 countries.

Near the vacant lot where the popular Sari Club once stood, ordinary Balinese have placed small offerings. Hotels on the island are flying flags of the nationalities of the victims.

"We shouldn't be rigid when it comes to praying, after all, what we are praying for is the good of everyone. We all suffered at that time, so we need each other now," said I Made Wendra, a Balinese community leader.

Foreign Minister Hassan Wirajuda said Monday the commemoration was a delicate balance between local Hindu beliefs in reincarnation and Western needs to remember.

Balinese custom is to ease the passage of the spirit before its reincarnation. Thousands of Balinese, joined by foreign victims, held ceremonies to do this a month after the October 12 bombings.

Indonesia is the world's most populous Muslim nation, but the three million people of Bali are mainly Hindu, a religion which has blended with local customs and beliefs.

Australian officials organizing a commemorative service for Sunday said the Balinese were welcoming victims back with open arms. Australia suffered the highest toll in the blasts, with 88 dead, followed by Indonesia with 38, mostly Balinese.

"The Balinese have been absolutely wonderful. It was (also) a tremendous tragedy for the people of Bali, they feel very strongly about it and I can't speak highly enough of the cooperation we've had," said David Ritchie, Australian ambassador to Jakarta.

MEGAWATI'S ABSENCE

Australian Prime Minister John Howard will attend the memorial service and other events. Indonesian President Megawati Sukarnoputri, who is part Balinese, will not be there because she will be hosting a state visit by Algeria's president.

At least one leading presidential candidate for next year's elections has criticized her decision.

But Howard, speaking on Australian radio, was conciliatory.

"I never thought she would go from way back and when there was talk earlier this week that she might after all go, I doubted that and she's not coming for very complicated cultural reasons, which I fully understand," he said Friday.

The Balinese ended their own mourning on November 15 last year in an elaborate ceremony during which Hindu priests sought to rid the island of evil. Religious differences meant as little to the Australian Christian families, the Indonesian Muslims or the Balinese Hindus then as they do now.

Megawati was invited to attend those ceremonies, but, once again, she stayed away.

The Balinese have suffered. Beyond their own dead, the bombings shattered their economic lifeblood -- tourism.

As part of efforts to put Bali back on the holiday map, the island has been holding a month-long festival called the Kuta Karnival. Organizers describe it as a "celebration of life."

Friday's events include an attempt to get the most surfers on one wave. Saturday, there will be a street parade and beach party.

The festival culminates Sunday with a day of solitude, including a remembrance ceremony on Bali's famous Kuta Beach, where incense and candles will be lit.

Balinese will mark the exact time of the almost simultaneous blasts at the nightclubs -- 11:08 p.m. -- Sunday with silence and the sounding of a traditional gong.

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