Indonesian President Joko Widodo (C), accompanied by first lady Iriana (11th L), Vice-President Jusuf Kalla (9th R) and his wife Mufidah (8th R), introduces his new cabinet at the presidential palace in Jakarta October 26, 2014. President Widodo on Sunday assigned professional technocrats to lead the top economic ministries and implement much-needed reforms that address costly fuel subsidies, cooling investment and the country's creaky infrastructure. REUTERS/Darren Whiteside

JAKARTA (Reuters) - Indonesian counter-terrorism forces on Saturday arrested three people near the capital Jakarta suspected of planning a bomb attack on the presidential palace, a police spokesman said.

The arrests of two men and a woman are the latest in a security crackdown ahead of the New Year holiday season and come amid concerns of a rise in Islamic State-inspired radicalism in the world’s largest Muslim-majority country.

Police raided a dormitory in Bekasi, a town about an hour outside Jakarta, and found an unexploded bomb.

“The plan was to use the bomb at the presidential palace during the change of guard,” Jakarta police spokesman Argo Yuwono said in a statement. He said an investigation was underway.

Police intercepted a letter the woman had intended to send to her parents stating her intention to carry out jihad, the police statement said.

Security forces carried out a controlled detonation of the bomb, local media reported.

Authorities say Islamic State has about 1,200 sympathizers in Indonesia and dozens are known to be fighting with the hardline Sunni militant group in Syria and Iraq.