The explosions were centered around Thamrin Street, a major shopping and business district in Jakarta close to foreign embassies and the United Nations offices.
According to police, the situation is now under control, with five suspected attackers among at least seven people killed.
ISIS claimed it carried out the attacks, a news agency linked to the militant group said.
Separately, Indonesian police said they suspected a local group allied to ISIS was to blame.
President Joko Widodo described the attacks as an “act of terror”.
“We all are grieving for the fallen victims of this incident, but we also condemn the act that has disturbed the security and peace and spread terror among our people,” he said.
Images from Jakarta have shown several bodies lying on the road outside a cafe, as well as seriously injured people being carried away.
Details remain unclear, but at least one of the blasts hit a Starbucks cafe and a police security post.
It appears the gunmen then holed up in the Djakarta Theater, part of the complex that houses the Starbucks.
Armed police, snipers and armored vehicles were deployed on the streets of the capital.
Gunfire broke out after police arrived at the cafe – there were several further explosions and reports of police chasing suspects. Sporadic gunfire was reported for several hours afterwards.
A few hours later, police said four attackers had been killed, then shortly after revised the number to five, including a foreigner.
National Police Deputy Chief Commander Gen. Budi Gunawan said two had been killed in a shootout outside a theatre and two others blew themselves up at the police post in front of Starbucks.
Police spokesman Col. Muhammad Iqbal said the situation was “under control”, with no suspects hiding inside the shopping centre.
Police had initially said there could be up to 14 assailants. Three attackers have been arrested, reports say.
Indonesia has been attacked by Islamist militant groups in the past and was on high alert over the New Year period after threats from ISIS.
There has been no confirmation of the group’s claim it carried out the attack, but National police spokesman Anton Charliyan said the group had earlier warned of a “concert in Indonesia” which would be international news.
Anton Charliyan said the attackers had tried to imitate the co-ordinated attacks on Paris and there was a “strong suspicion that this is an ISIS-linked group in Indonesia”.
Up to 200 Indonesians are estimated to have gone to Syria to fight with ISIS.
Indonesia is the world’s most populous Muslim nation but by and large is secular, although in recent years the threat of radicalism has remained high as small networks of militants are still thought to be operating in the country.
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