The suspect, Haydar Khani, alias Ali Hamid, was arrested in a hotel room in Senayan, south Jakarta.

Police also arrested two men they said have connections toKhani and they continue to search residences of people known to the suspects.

Next week, as part of their investigation, the National Police's people smuggling unit will send a team to Australia to question survivors of the wrecked Siev 221, which was smashed to pieces in rough seas only yards from Christmas Island in December.

The arrests in Jakarta come days after an Australian court charged three Indonesians with people smuggling in the case of the stricken wooden-hulled Siev 221 in which around 50 of the 90 passengers died.

The men, aged 60, 32 and 22, were denied bail after the hearing in Perth, Western Australia. Each defendant, if found guilty, could be sentenced to 20 years in prison and fined around $220,000.

All three men will appear in an Australian court Feb. 15 for the start of a trial into the deaths of the asylum seekers, many of whose dramatic last moments were filmed close up as they clung to the wooden ship breaking apart against shoreline rocks in high seas.

Another alleged people smuggler is believed to have left the vessel before it entered Australian waters. It isn't known if the man who left the vessel is the Australian citizen arrested in Indonesia.

Indonesian police briefly detained Khani for questioning on the island of Flores in 2009, the head of the country's people-smuggling unit, Budi Santoso, said. ''He said he was sick with a mental illness for 10 years and was admitted to hospital," Santoso said.

Khani is suspected of being involved with helping organize six boatloads -- including the Siev 221 -- of potential asylum seekers set sail for Australia last years.

Police picked up Khani this time based on a tip from Australian Federal Police and the testimony of two Indonesians arrested earlier this year said they provided food and other logistical support for the boats.

Khani, who has been in Indonesia for a year and a half on a tourist visa, may be extradited to Australia for questioning over his involvement in the Siev 221 sinking. But no formal extradition request has been made, Australia's ambassador to Indonesia, Greg Moriarty, said.

Australian consular officials have visited Khani and confirmed that he is a dual Australian and Iranian citizen, Moriarty said. "Extraditions are a very complicated business,'' he said.

Cooperation between Indonesia and Australia over people smuggling has foundered on lack of extradition laws and also what Australians believe are lax penalties in Indonesia for transgressors.

If Khani is charged, he will be only the second person taken to an Indonesian court for organizing people smuggling to Australia, the government-owned Australian Broadcasting Corp. said.

Critics of Indonesia's record of clamping down on people smugglers point to the case in March of Abraham Lauhenapessy, a 49-year-old Indonesian.

Lauhenapessy, also known as Captain Bram, was arrested in October 2009 in Indonesian waters after the Indonesian navy intercepted his 90-foot wooden boat carrying 250 Sri Lankan would-be asylum seekers. He was discovered hiding among the asylum seekers on the vessel Jaya Lestari 5.

His trial in Jakarta ended in farce when he was freed after being fined $3,000 for not having the correct sailing documents for his ship. He was placed on probation for 18 months, six months less than prosecutors demanded. If he has a similar conviction, he will go to prison for a year.

Australia continues to battle people smugglers in an attempt to stem the flow of thousands of asylum seekers arriving in national waters and reaching land, most often Christmas Island, the isolated Australian territory 750 miles from the mainland off Australia's west coast.

Despite the efforts, around 5,000 asylum seekers reached Australia last year, putting a strain on the country's over-stretched detention facilities.

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