A huge car bomb tore through one of the top hotels in Indonesia's capital killing 14 people and wounding 150.
The governor of Jakarta said a suicide bomber was probably responsible for the blast at the JW Marriott Hotel.
The blast ripped through the lobby and set fire to dozens of cars at the frontof the hotel in what was the second major terror attack to on the world's most populous Muslim nation in a year.
The bombing lunch hour blast comes just two days before a court delivers the first verdict in the trials of Muslim militants accused over last October's Bali bombings.
As workers poured out onto the streets from a nearby office tower, or ate lunch in restaurants and cafes around the hotel they were showered with shards of glass from windows blown out by the explosion.
Wreckage from the charred lobby was strewn over a wide area.
"It was panic. Mad panic," said Mr Stephen Mellor, a foreign resident who was parking his car less than 100 yards from the hotel at the time of the blast.
"The police and paramedics did what they could, but they seemed overwhelmed. People were almost hijacking cars in desperation and piling the injured in them to take to hospital."
Australian tourist Mr Simon Leuning had just arrived in Jakarta and was relaxing in his hotel room when the explosion occurred.
"The window blew in, blew me across the room," he said. "I got out of there as fast as I could."
The Indonesian Red Cross said 14 people died and 150 were wounded.
"Thirteen bodies have been evacuated to hospitals while the last one, a human head without body, was just found by a Red Cross team on the fifth floor of the hotel," a senior official said.
National Police Chief Gen Da'i Bachtiar said the car bomb blew up near the lobby, not the basement as earlier reports suggested. He said the blast was similar to the Bali bombings.
The attack coincided with the high-profile trial of prominent cleric Mr Abu Bakar Bashir and other suspected Islamic militants.
Mr Bashir is accused of leading the Southeast Asian Jemaah Islamiah militant Muslim network blamed for a series of attacks on Western targets, including October's Bali bombings that killed 202 people, most of them foreign tourists partying in nightclubs.
Police have said a Dutch banking executive was among today's dead, while four Singaporeans, two Americans, two Australians and a New Zealander were among those wounded.
Gen Bachtiar said one of the many areas of investigation would include several people who had yet to be arrested over the Bali attacks, although he gave no names and did not say anyone was suspected.
The Marriott, popular with foreign businessmen, is in the wealthy suburb of Kuningan on a major road through the city's business district. The hotel is close to the diplomatic area of Menteng where many Western embassies and consulates are based.
The US last week said Osama bin Laden's al Qaeda network was planning new suicide hijackings and bombings and its Indonesian embassy today said the blast was a reminder to Americans to exercise "rigorous" security precautions.