Indonesia counter-terrorism forces foil plot to bomb state palace - police

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 sympathisers in Indonesia and dozens are known to be fighting with the hardline Sunni militant group in Syria and Iraq.