The explosions occurred near Sarinah, a shopping mall in Central Jakarta, near office buildings and fast food outlets. One police officer and three other people are confirmed dead by Indonesian police. Reports of three other dead have not been confirmed by police.

Chief security Minister Luhut Panjaitan said that seven people were killed today, five of whom were terrorists.

He said there had been five bombs, one in front of the Starbucks at the base of the Skyline building near the Sarinah mall.

He confirmed that a Dutch citizen had been killed in the attacks.

"We ask people to remain calm and not believe baseless information because we are still in control," he said.

At 4pm (8pm AEST) Indonesian president Joko Widodo will meet with staff at the palace to discuss the terrorist attacks.

Reuters is reporting that Indonesian police have arrested four suspected militants believed to have been involved in the gun and bomb assault in the centre of the capital.

Police said reports of similar explosions in Cikini (Central Jakarta), Kuningan (South Jakarta), Simatupang (South Jakarta) and Slipi (South Jakarta), as well as reports of gunshots in the area of Palmerah (West Jakarta) were a hoax. Attacks were limited to the Central Jakarta area, police said.

A third bomb was deactivated by the bomb squad around 6.30pm AEDT in the Starbucks parking lot in Central Jakarta.

A UN building near the scene was in lock-down. Some other high-rise buildings in the area were evacuated.

Indonesia's central bank is located in the same area, and a spokesman for the bank said a policy meeting was going ahead and a decision on interest rates would be announced as planned later in the day.

Indonesia has been on edge in recent weeks over the threat posed by Islamist militants and counter-terrorism police have launched a crackdown on people with suspected links to Islamic State.

"We have previously received a threat from Islamic State that Indonesia will be the spotlight," police spokesman Anton Charliyan told reporters. But he said police did not yet know who was responsible.

Jakarta police chief Tito Karnavian said as of Thursday 11am local time, Jakarta is on highest possible alert for terrorism. 

Terror expert Taufik Andrie: "The style of attack is similar to the one used in paris, so it's possible it have ISIS link to it. They used bom and guns. But it is also possible it's done by a terrorist with a different agenda."

"What I find interesting is, they were targeting random public. They were attacking a mall. In recent years, terrorists in Indonesia, target officials, police, not public. If it's ISIS, then they are politically saying, Indonesian Islam, is not "the Islam". They do not acknowledge it, even though 90 per cent of Indonesia is Muslim, it's not ISIS islam."

"But at the moment, it's to early to say. To many information is out there, we'd best wait for police to finish their investigation, mainly to arrest all perpetrators in Sarinah."About 300 police officers, including the bomb disposal unit were stationed outside the Sarinah shopping mall.One or two suspected terrorists fled the scene heading to Palmerah in west Jakarta.Mr Anton Charliyan said it was not yet known what group the terrorists came from."Neither do we know about their weapons until we analyse the bullets," he said.

The Australian government is advising people to avoid the area. " Australians should avoid the affected area, limit their movements and follow the instructions of local authorities. The overall level of advice has not changed. We advise you to exercise a high degree of caution in Indonesia, including Bali," it said on its website.

"Our embassy is making urgent enquiries with local authorities to determine whether any Australians have been affected. This incident is still unfolding and it is too early to determine the scale of damage or extent of casualties," the office for Foreign Affairs Minister Julie Bishop said. 

Attorney General George Brandis said the Australian Government has offered law enforcement and intelligence assistance to Indonesia following the deadly attacks in Jakarta today.

"I have contacted my counterpart in Indonesia, the Coordinating Minister for Political, Legal and Security Affairs H. E. Luhut B. Panjaitan, to convey Australia's support," he said.

"The offer follows our recent meeting at the Inaugural Indonesia-Australia Ministerial Council on Law and Security in which we agreed to closer operational and technical counter terrorism cooperation."

The United States Embassy has issued an emergency message to advise all US citizens to avoid the area around Sari Pan Pacific Hotel and Sarinah Plaza in Jalan Sudirman, and Thamrin in Central Jakarta.

Security consultancy firm Hillman Jakarta said told people to limit their movements to "essential only" untilt he city is confirmed as cleared of all gunmen. It recommended people avoid the Jakarta CBD and all government buildings.

President Joko Widodo has condemned the explosions as an act of terror.

"I certainly convey deep condolences to the victims of this explosion," he said in a statement.

He didn't want to speculate on what was behind the blasts and asked that others refrained also.

"Let's give the police a chance to investigate and track the perpetrator and mastermind of this terror," he said.

"Whatever the motive is, we condemn the act of terror that has disturbed the public's peace."

The explosions were followed by a blast of gunfire, according to Jeremy Douglas, who works at the United Nations building on Jl Thamrin, where the chaos was unfolding around 11am local time.

"Serious exchange of gunfire in downtown Jakarta," he tweeted.

Police are telling journalists to stay away from the area. Police were seen positioning snipers at nearby buildings after explosions.

Mr Charliyan said up to six suspected terrorists were involved.

"Four people have been killed including one policeman," he said.

Mr Charlyian said it was unclear whether or not the terrorists were killed or fled the scene. He said up to six suspects were believed hiding in the Skyline building. The Starbucks coffee shop is in the lobby of the Skyline building.

A witness told Fairfax Media a young man carrying a gun opened fire at a police station in front of a McDonald's restaurant in Thamrin St. The witness said he helped the injured policeman but there was "a lot of blood".

Local media website Liputan6 showed an image of a small police kiosk in the middle of Jl Thamrin destroyed, and several bodies on the ground.

A UN employee tweeted live from near the scene as viewed from his office.

Hours before the attacks fugitive al-Qaeda's leader Ayman al Zawahiri posted a message saying south-East Asia "is ripe for a jihadist revival" and urged attacks like the 2002 Bali bombings that killed 202 people, including 88 Australians.

Al Zawahiri primarily focused a 24-minute posting on al-Qaeda's propaganda arm As Sahab on the region, mentioning Indonesia, Malaysia and the Philippines. That video opens with an old CNN interview with Bali bomber Amrozi Nurhasyim who said 'My message for Australians: don't come to places like that ever again... I'm sure that my colleagues will bomb it again." Amrozi was executed over the bombings.

Al Zawahiri's posting contained footage of other Bali bombers and radical Indonesian cleric Abu Bakar Bashir. The US has a US$25 million reward for the capture of Egyptian born al-Zawahiri.

The attacks come after another video was posted on the internet claiming that four extremist Islamic groups in the southern Philippines had merged, creating a new potent threat to the region.Leaders of the groups have pledged allegiance to Islamic State.

A Jakarta witness by the name of Ika claimed to see two police cars explode.

"We heard a loud sound. We thought it was thunder. We looked out the window and saw a police car blown up. Soon after more police cars arrives. The second one blown up, after that they shooting starts"."

Husain, an employee at nearby bank, told Fairfax Media: "First there was explosion in front of Starbucks at Marinah just before 11. Then people panicked tried to avoid Starbucks, people ran away. Went to nearby police station and saw a bomb in front of the police station.

"We're terrified, tried to run away shouting 'bomb, bomb'. This guy suddenly was there and opened fire with pistol. Shot the police man in his stomach. After that shot randomly. Witness tried to save police," Husain said.

Another witness, Oly, said the gun shots stopped before police entered a fast food restaurant.

"On the streets people just abandoned their vehicles. Just like that and ran," Oly said.

How it happened:

- with Reuters, AAP