Islamic State has claimed responsibility for the terror attack in Jakarta that killed two people and five terrorists who police believe have links to a fighter in Syria.

The suicide bombing and gunfight took place on Jl Thamrin, between a Starbucks coffee shop and a police post in the middle of a busy intersection at a.bout 10.30am local time (2.30pm AEDT) yesterday

The victims were an Indonesian and a Canadian, and a further 15 people and five police were wounded.

The injured include an Algerian, Austrian, German and Dutchman.

Do you know more or did you witness the attacks? Email contact@9news.com.au

One of the attack gunman walks on the street as crowds flee. (Veri Sanovri/Xinhua via AP) (Veri Sanovri/Xinhua via AP)

A suicide vest, explosives, pistols and a knife captured following the shootout with police. (Twitter)

Islamic State officially claimed responsibility for the attack late last night, with a news agency affiliated to ISIL also reporting the group was behind it.

"A group of soldiers of the caliphate in Indonesia targeted a gathering from the crusader alliance that fights the Islamic State in Jakarta through planting several explosive devices that went off as four of the soldiers attacked with light weapons and explosive belts," the group said in a statement.

Jakarta Police Chief Tito Karnavian revealed the attackers were linked to IS in Raqqa, Syria, in particular an Indonesian named Bahrun Naim.

"He wants to be the leader of ISIS groups in Southeast Asia," he said.

Gunfire at the scene. (Twitter)

Between two and seven explosions rocked the area around a popular shopping centre, the Sarinah at the crossroads of Thamrin Road and Wahid Haysim Street, as bombers and gunmen carried out attacks on a Starbucks café and a nearby police post.

Video from the scene shows at least one attacker detonating a suicide vest near the shopping centre, exploding as he approaches the building.

Indonesian media has reported that three suicide bombers targeted the Starbucks in the shopping centre, while two gunmen attacked the police station, triggering a gunfight.

Another blast occurred on nearby Thamrin Road, the same street as the United Nations local headquarters.

Following the initial attacks, it is believed the surviving gunmen pulled back into a nearby theatre. Counter terrorism police surrounded the building and a fresh round of heavy gunfire broke out as police stormed the building.

Smoke rises over the scene. (Supplied)

A popular shopping mall and a police post were attacked. (Supplied)

There were reports of another explosion during the stand-off.

Indonesian media tweeted photos of a captured suicide vest, pistols, knives, ammunition and explosives devices following the shoot out.

A bank security guard told the Associated Press he saw at least five attackers, including three wearing suicide vests, attack the Starbucks as part of the coordinated strikes.

The guard, Tri Seranto, said the three bombers detonated their vests one by one after they entered the café.

Police firing at the terrorists (left), who were equipped with suicide vests and automatic weapons (right).

He said the other two attackers, carrying handguns, entered the police post from where he heard gunfire, before fleeing the scene with police chasing them.

The Department of Foreign Affairs and Trade have urged Australians to exercise a high degree of caution if travelling in Indonesia.

A statement from Foreign Minister Julie Bishop said the embassy was making urgent inquiries to determine if any Australians had been killed or injured.

"This incident is still unfolding and it's still too early to determine the scale of damage or extent of casualities," she said.

Starbucks has issued a statement, confirming one customer was injured during the attack on the Jakarta store.

Emergency services at the scene. (Supplied)

"One customer sustained injuries and was treated on the scene; our partners (employees) are all confirmed to be safe," the statement read.

"This store and all other Starbucks stores in Jakarta will remain closed, out of an abundance of caution, until further notice."

A United Nations staffer, Jeremy Douglas, was working in a UN building nearby when the blasts rang out.

He has tweeted, saying he has heard a hail of gunfire, followed by police and security forces urging everyone to stay away from doors and windows.

Smoke rolling across the city. (Twitter)

After a series of attacks on foreigners in the last decade, Indonesian extremists have in recent years directed their violence at domestic "enemies of Islam", mostly police.

There have been no attacks against foreigners since the 2009 twin hotel bombings in Jakarta which killed seven people.

The numbers are 1 300 555 135 within Australia or +61 2 6261 3305 if calling from overseas.