Six survivors have been rescued from Palu's Roa-Roa Hotel, but up to 60 remain trapped in the building which was completely flattened after a massive earthquake and ensuing tsunami hit the Indonesian island of Sulawesi, killing more than 400 people.

Key points: More than 600,000 people live in Donggala and Palu

More than 600,000 people live in Donggala and Palu An Indonesian disaster agency spokesman said the fate of "tens of hundreds" of people involved in a beach festival at Palu was unknown

An Indonesian disaster agency spokesman said the fate of "tens of hundreds" of people involved in a beach festival at Palu was unknown Aerial photographs released by the disaster agency show many buildings and shops destroyed

Authorities expect the toll to rise sharply as news arrives from remote areas, but the situation within the collapsed Roa-Roa Hotel remains particularly dire.

"Communication is cut off. All we knew is that 24 guests were successfully evacuated and one has died," hotel owner Ko Jefry told Metro TV on Saturday night.

"It is estimated that 50 to 60 people remain trapped."

The tsunami struck after a warning was lifted because the nearest tidal sensor was 300 kilometres south of the city of Palu and only detected an "insignificant" six-centimetre wave.

Waves were initially reported as two metres high, later raised to three metres, but the funnel effect of the shape of Palu harbour meant some waves were up to six metres.

The Head of the National Disaster Management Agency (BNPB), Willem Rampangilei, told reporters in Sulawesi late on Saturday that the death toll from Palu had reached 420 people, according to news website Kompas.

Body bags are left in the streets as rescue workers struggle to reach all the dead. ( AP: Rifki )

Indonesia's Vice President Jusuf Kalla warned it could rise into the thousands.

Mr Kalla issued the warning on Saturday afternoon local time, pointing out there was "no word" yet from a city of 300,000 people.

Echoing the concern, the Red Cross said the lack of communication with the city of Donggala was "extremely worrying".

"We're now getting limited communications about the destruction in Palu city, but we have heard nothing from Donggala and this is extremely worrying," a statement from the organisation said.

More than 600,000 people live in Donggala and Palu.

The Red Cross said its staff and volunteers were heading to the affected areas.

"This is already a tragedy, but it could get much worse," it said.

Indonesian disaster agency spokesman Sutopo Purwo Nugroho said 384 people had been killed in the hard-hit city of Palu alone, and communications "were totally crippled with no information" from Donggala.

He said the fate of "tens to hundreds" of people who were taking part in a beach festival in Palu when the tsunami struck at dusk on Friday was also unknown.

"When the (tsunami) threat arose yesterday, people were still doing their activities on the beach and did not immediately run and they became victims," said Mr Nugroho.

"The tsunami didn't come by itself, it dragged cars, logs, houses, it hit everything on land," he said, adding that the tsunami had travelled across the open sea at speeds of 800 kilometres per hour before striking the shoreline.

Palu is built around a narrow bay. ( Google Maps )

Some people climbed trees to escape the tsunami and survived, he said.

Amateur footage shown by local TV stations showed waves crashing into houses along Palu's shoreline, scattering shipping containers and flooding into a mosque in the city.

Photos confirmed by authorities showed bodies being lined up along the street on Saturday, some in bags and some with their faces covered with clothes. Around 16,700 people were evacuated to 24 centres in Palu.

Aerial photographs released by the disaster agency showed many buildings and shops destroyed, bridges twisted and collapsed and a mosque surrounded by water.

Tsunami expert Abdul Muhari, who heads a tsunami research team within the Indonesian government, told ABC the death toll for the Palu Bay area would likely top 1,000 based on figures he received on Saturday evening from the head of the search and rescue team.

"If we assume they have just worked in 20 per cent of the search and rescue area and already have confirmed almost 400 casualties, then we could expect a figure probably higher than 1,000," he said.

The city of Palu is built around a narrow bay that apparently magnified the force of the tsunami waters. ( Reuters: Antara Foto, Darwin Fatir )

Aftershocks hit island

On Saturday aftershocks hit Sulawesi, panicking locals struggling to come to grips with an earthquake and the tsunami.

The tsunami, which followed a magnitude-7.5 earthquake, swept away buildings and dumped victims caught in its relentless path across a devastated landscape that rescuers were struggling to reach on Saturday, hindered by damaged roads and broken communications.

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Mr Nugroho said via Twitter experts suspected the tsunami was caused by an underwater avalanche triggered by the earthquake.

The tweet was accompanied by footage showing analysis of the Palu Koro Fault that runs underneath Palu.

Mr Nugroho also posted images of 83 army personnel and "6,943 kg of goods" on route to Palu via Hercules aircraft carriers.

The Jakarta Post reported that although the airport in Palu had been substantially damaged, 2,000 metres of runway remained intact and could be enough to land the Hercules cargo aircraft.

Palu, which has more than 380,000 people, was strewn with debris from collapsed buildings.

A mosque heavily damaged by the quake was half submerged and a shopping mall was reduced to a crumpled hulk. A large bridge with yellow arches had collapsed.

Bodies lay partially covered by tarpaulins and a man carried a dead child through the wreckage.

The city is built around a narrow bay that apparently magnified the force of the tsunami waters as they raced into the tight inlet.

Indonesian TV showed dramatic smartphone video of a powerful wave hitting Palu, with people screaming and running in fear. The water smashed into buildings and the damaged mosque.

Hundreds of people were injured and hospitals damaged by the quake were overwhelmed.

People stand outside a damaged hospital in Palu. ( Reuters: Antara Foto )

Communications with the area were difficult because power and telecommunications were cut, hampering search and rescue efforts.

"We hope there will be international satellites crossing over Indonesia that can capture images and provide them to us so we can use the images to prepare humanitarian aid," Mr Nugroho said.

The disaster agency has said that essential aircraft can land at Palu's airport, though AirNav, which oversees aircraft navigation, said the runway was cracked and the control tower damaged.

One of AirNav's traffic controllers, aged 21, died in the quake after staying in the tower to ensure a flight he had just cleared for departure got airborne safely. It did.

Sorry, this video has expired Hospitals were inundated with injured patients after the earthquake.

Prisoners escape amid chaos

More than half of the 560 inmates in a Palu prison fled after its walls collapsed during Friday's quake, said its warden, Adhi Yan Ricoh.

"It was very hard for the security guards to stop the inmates from running away as they were so panicked and had to save themselves too," he told state news agency Antara.

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Mr Ricoh said there was no immediate plan to search for the inmates because the prison staff and police were consumed with the search and rescue effort.

"Don't even think to find the inmates. We don't even have time yet to report this incident to our superiors," he said.

Indonesian President Joko "Jokowi" Widodo said on Friday night he instructed the security minister to coordinate the Government's response to the disaster.

Mr Jokowi also told reporters in his hometown of Solo that he called on the country's military chief to help with search and rescue efforts.

He is scheduled to visit evacuation centres in Palu on Sunday.

A spokesperson for Australia's Department of Foreign Affairs and Trade said the Australian Government was not aware of any Australians affected by the earthquake but was continuing to make enquiries with local authorities.

"The Australian Government has not received a request for assistance at this time," the spokesperson said.

"Australia stands ready to assist the Government of Indonesia, if international assistance is required."

UN spokesman Stephane Dujarric said UN officials were in contact with Indonesian authorities and "stand ready to provide support as required".

Indonesia is frequently hit by earthquakes, volcanic eruptions and tsunamis because of its location on the "Ring of Fire," an arc of volcanoes and fault lines in the Pacific Basin.

In December 2004, a massive magnitude 9.1 earthquake off Sumatra island in western Indonesia triggered a tsunami that killed 230,000 people in a dozen countries.

On August 5, a powerful quake on the Indonesian island of Lombok killed 505 people, most of whom died in collapsing buildings.

Sorry, this video has expired Clean-up efforts are underway in Indonesia, where an earthquake and tsunami killed dozens of people.

AP/ABC