Abu Bakar Bashir is regarded as the spiritual leader of militant Islam in Indonesia, and was thought to be a key figure in regional terror network Jemaah Islamiyah, blamed for the 2002 Bali bombings that killed more than 200 people.
He was sentenced to 15 years in jail in 2011 for helping fund a paramilitary group in Aceh, a staunchly Islamic province in the world's most populous Muslim-majority country, which planned to kill the then president as well as Westerners.
His legal team are arguing that funds Bashir collected were intended to help people in the Palestinian territories, but ended up getting sent to the Aceh group without his knowledge.
However Bashir, a frail, bespectacled man with a bushy white beard, appeared to undermine his own case by admitting to knowing about the group's Aceh training camp during a fiery tirade in court Tuesday.
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Bashir also told the packed courtroom that the judges should repent for acting against the Koran.
Today's hearing was brief. Prosecutors will respond to the lawyers' arguments later this month.
About 500 supporters, most of whom were dressed in white Islamic skullcaps, packed out the courtroom and gathered outside, and more than 1,000 security personnel had been deployed.
"Bashir is a cleric, not a terrorist," a supporter shouted, while others yelled "God is great, God is great" and thrust their fists into the air.