The 66-year-old cleric told trial judges on Tuesday that he supported the Islamic holy struggle, or jihad, but that violence should take place only within conflict zones such as Afghanistan, Pakistan and the Philippines.
Referring to the Bali nightclub and Marriott hotel bombings, he said: "I disapprove, if they were regarded as jihad, because they were executed in peaceful or non-conflict zones.
"If the aim were to attack the interests of the United States, the country that has clearly violated and attacked Islam, they should have taken up arms in Afghanistan, Pakistan, the Philippines or other such places."
Prosecutors have charged Bashir with inciting the bombings of nightclubs on the resort island of Bali in October 2002 that killed 202 people, mostly foreign tourists, and the 2003 bombing of the JW Marriott in Jakarta that killed 12.
He is also charged with leading Jemaah Islamiya, a group seen as the regional arm of al-Qaida and which has been blamed for a string of attacks in Southeast Asia, including those in Indonesia.
Bashir has consistently denied wrongdoing, saying the charges are a result of Western pressure.
A former interpreter for US President George Bush testified earlier that Washington had pressed Indonesia to secretly detain and hand over Bashir shortly before the Bali bombings in 2002.
Bashir was first arrested shortly after the Bali blasts, but attempts to convict him of leading Jemaah Islamiya failed.
He did, however, serve 18 months for immigration violations and was re-arrested under anti-terror statutes in April.
The new trial began in October, if found guilty, Bashir could be sentenced to death.
The court has been adjourned until 8 February, when prosecutors expect to announce their demands for sentencing.