Indonesian counter-terrorism forces arrested three people on Saturday near the capital, Jakarta, suspected of planning a bomb attack on the presidential palace.

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 Indonesia.

Prime Minister Malcolm Turnbull and wife Lucy at the presidential palace in Jakarta in November 2015. Credit:Andrew Meares

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.