This explosion at a Starbucks cafe is one of six bombs that went off in several locations in the centre of Jakarta.
A gunfight followed.
Police say at least six people are dead.
The attack came after a threat by Islamic State fighters to put the country in their "spotlight".
Police suspect a suicide bomber is responsible for at least one of the blasts and more than a dozen militant gunmen are involved in the attack.
Indonesia has been on edge in recent weeks over the threat posed by Islamic State.
Counter-terrorism police have launched a crackdown on people with suspected links to the group.