The bomb that rocked the Ritz-Carlton Hotel in Jakarta appeared to be planted inside the restaurant and exploded as hotel guests were sitting down to breakfast, says Fairfax's Indonesian correspondent Tom Allard.

Reporting from outside the Ritz, Allard said the windows of the ground floor restaurant had been blown out by the blast, which occurred about 7.45am local time (10.45am AEST).

"From what witnesses are telling us ... it's pretty clear the bomb was actually planted inside the building rather than being a car bomb or some such outside the building, which has been the modus operandi in previous attacks here in Jakarta," he said.

Fairfax Jakarta correspondent Tom Allard says the bomb appears to have been planted inside one of the hotels, rather than outside.

"It may be a smaller-scale explosive device, but they got it inside and given the humungous security outside these hotels, that's a surprising and interesting development."

A huge police contingent had set up a perimeter around the hotel, across the road from the Marriott Hotel which was also hit in the near-simultaneous bombing attack.

Allard said hotel guests he had spoken to reported seeing bodies removed and injured people being treated after the explosion.

"At that time, people were sitting down to have breakfast in the restaurant. It's unfortunately not surprising indeed if we have found that people have died in these attacks," he said.

The attacks would come as a wake-up call to the many experts who had suggested the terrorism threat had abated with the arrests of hundreds of Jemaah Islamiah associates in recent years.