A car bomb exploded outside the fortified Australian embassy in Jakarta Thursday killing at least seven people and causing massive damage just weeks before Australia, a key US ally in Iraq, votes in general elections.

The force of the blast, which Australian Foreign Minister Alexander Downer described as a terrorist attack on his country, punched windows out of nearby tower blocks and badly mangled the security perimeter around the embassy.

Indonesian officials confirmed a bomb had caused the blast, which follows alerts by the United States and Australia warning that Islamic extremists blamed for other attacks in Indonesia could strike again.

The Al-Qaeda-linked Jemaah Islamiyah was responsible for the October 2002 Bali bomb attacks in which 202 people, 88 of them Australian, were killed and an August 2003 car bomb strike on Jakarta's Marriott hotel that left 12 dead.

Officials at hospitals in Jakarta's confirmed seven fatalities from Thursday's blast and at least 99 injured. A list of casualties issued by the hospital showed up to five foreigners were among the injured.

The blast at around 10:30 am (0330 GMT) prompted the immediate evacuation of the embassy and caused a sharp drop of nearly four percent on the Jakarta stock market.

Witnesses said a police truck and a taxi in front of the embassy had been blown apart and the high steel fence surrounding the building in the Kuningan business and residential district was damaged.

A guard's post in front of the embassy was also destroyed.

An AFP reporter at the scene saw burning debris in the road outside the embassy, roughly 100 meters (yards) from the perimeter wall, as emergency services tried to extinguish flames and tend to the injured.

A nearby multi-story commercial block was left windowless by the blast

The Australian foreign ministry in Canberra said the explosion shattered windows in the embassy compound and damaged cars, but there were no immediate reports of injuries among embassy staff.

"The embassy has been evacuated in line with established procedures," she said.

The conservative Australian government of Prime Minister John Howard, which is seeking reelection next month, has warned Australians to avoid travel to Indonesia because of the threat of terrorist attacks.

Australian Foreign Minister Downer, who is due to fly into Jakarta later Thursday, said the blast was a deliberate strike on Australian interests, although no Australian citizens were killed.

"It is clearly a terrorist attack, it was outside the Australian embassy, you would have to conclude that it was directed towards Australia," Downer told reporters in Adelaide.

"At this stage we don't know who was responsible for the explosion, it could take a bit of time to establish that, as is often the case," Downer said. "Naturally enough our suspicions turn to Jemaah Islamiah."

Both Australia and the United States last week raised new warnings urging their citizens and officials to avoid Western hotels in Jakarta following fresh concerns they could be hit by terrorists.

The warnings reminded citizens to defer non-essential travel to the Southeast Asian archipelago.

Australia, which joined the United States in invading Iraq last year and has been a key supporter of the US-led war on terror, has been on alert for possible attacks ahead of national elections to be held on October 9.

(China Daily September 9, 2004)