TWO of the men who escaped from Bali's Kerobokan jail have reportedly been found more than 1100km away at a luxury resort that offers "romantic weddings” and conference facilities.

Indian Sayed Mohammed Said, who is serving a 14-year sentence on drug smuggling charges, and Bulgarian Dimitar Nikolov Iliev, serving seven years for ATM fraud, were tracked down at Novo Turismo resort in Dili, the capital of East Timor, local police said.

The luxury resort contains "pool view rooms” and "presidential suites” with an in-house gym, entertainment and business centre and is a one hour and 45-minute flight from Bali's Denpasar airport.

Australian Shaun Edward Davidson, 33, and Malaysian man Tee Kok King remain at large.

East Timor police chief superintendent Henrique Da Costa told Fairfax Media the two men had been arrested at the hotel.

It's thought the men entered East Timor on Wednesday by boat from the Indonesian island of Alor in East Nusa Tenggara.

A hotel worker who did not want to be named told News Corp "everything had returned to normal” at the hotel after the men were apparently found there during the morning shift.

"There is no problem in here, no big issues,” he said, adding he thought the men had been guests but was "lacking clear information”.

The daring escape made headlines around the world when the four men apparently squeezed through a narrow tunnel in a bid for freedom.

Davidson had just two months and 15 days left to serve before he was due to be deported to Australia to face drug charges in his hometown, Perth.

Earlier, Badung Police Chief Yudith Hananta had said the men could be shot if they resisted arrest.

"If they fight against police we will take firm action based on the police law, including shooting them,” Mr Hananta said.

"We urge them to surrender. Don't let the police do firm action.

"Please come to the nearest police station to surrender.”

- Victoria Craw