UPDATE - At least 150 people, mostly tourists, are reported to have been killed early this morning when a car bomb exploded outside a packed nightclub in Bali - one of three blasts to rock Indonesia within hours of each other.

At least 274 were injured in the blast at Kuta Beach described as the worst terrorist attack in Indonesia's history.

The explosion happened about 11pm local time (4am NZT), destroying the Sari and Padi nightclubs at Kuta Beach - a tourist spot popular with Western backpackers and surfers.

"There are 150 dead," Sanga Hospital communications chief Dr. Puta Putra Wisade told Reuters by telephone. Asked his estimate of how many were not Indonesians, he said: "Seventy-five percent are foreigners."

The doctor said bodies were still being brought into the hospital.

Many more bodies were reported to be buried beneath the rubble of the destroyed clubs.

Police said the dead included nationals from Australia, Britain, France, Germany and Sweden.

Ministry of Foreign Affairs (MFAT) said they could not confirm reports this afternoon that a New Zealander had been killed in the blast.

An MFAT hotline for people concerned about relatives or friends in Bali has been set up. The number is 0800 432 111.

MFAT spokesman Brad Tattersfield said six New Zealanders, including a Lower Hutt man who was badly burned, were known to be injured at this stage.

Mr Tattersfield said it was too early to say whether any of the dead were New Zealanders.

But a doctor at Sanglah hospital, who gave her name as Darma, told Agence France-Presse (AFP) news agency that one of the casualties who died after being brought to the hospital was identified as a New Zealander.

Local media reports said none of the people reported dead were from New Zealand.

No group has claimed responsibility for the attack, but terrorism is suspected.

General Da'i Bachtiar was quoted by AP as saying: "This is the worst act of terror in Indonesia's history."

"We have to be more alert for other acts of terror including international terrorism in the future."

"If you look at the number of victims, this was indiscriminate and there is indeed a possibility this was terrorism," chief Dai Bachtiar told reporters at Jakarta's airport before leaving for Bali.

"It does look as though a terrorist organisation was involved," Australia's Foreign Minister Alexander Downer told ABC television.

"And secondly it clearly looks as though this attack has been coordinated, and it clearly looks like an attack against foreign interests."

The blast was said to have damaged buildings about half a kilometre away and left a crater 1.5m deep. The Jakarta Post newspaper said bodies were seen strewn at a radius of 10m from the centre of the blast.

The blast caused a fire which ripped through neighbouring buildings along the main nightclub street of Poppies Gang 2 in Kuta Beach.

Three hours after the car bomb exploded, firefighters were still reported to be fighting the blaze.

Brimming with restaurants and bars, Kuta would have been particularly busy on Saturday night.

A diplomat from the New Zealand Embassy in Jakarta, Nigel Allardyce, is flying to Bali today. In the meantime, MFAT is working through the Australian Consular Office in Bali.

Bali police spokesman Yatim Suyatmo said police believed the car bomb was homemade.

Suyatmo told the Jakarta Post the explosion was suspected to have come from a car parked outside Bank Panin, across the road from the nightclubs.

A spokesperson for Jakarta's US Embassy was also quoted by the AAP news agency as saying a car bomb was to blame for the blast.

A local photographer said windows on shops had been blown out up to 500m away from the Sari nightclub, and that the blast had wrecked up to 15 cars and been heard many kilometres away.

"The Sari club is gone. You can smell the bodies of those who died," he said.

Australia's ABC radio reported that 20 members of Perth's Kingsley Football Club were inside the Sari Club when the explosion happened. At least six were this morning reported to be missing.

AAP said the blast was one of two that occurred in Indonesia overnight. The second struck close to the US honorary consulate at Bali's Sanur beach.

Embassy spokeswoman Greta Morris was quoted as saying it was not clear what had caused the second explosion about 50m away from the consulate.

A third blast was reported to have hit the Philippines consulate in the North Sulawesi city of Manado, a popular dive spot for foreigners, earlier on Saturday evening.

The explosion blew out the windows of the two-storey consulate and knocked over the gate of the compound.

There were no reports of injuries at these explosions.

Australia's Downer told AAP this afternoon that Australians were almost certainly killed in the Sari blast and 40 Australians were in hospital.

He said all flights from Australia to Bali were suspended for at least today.

The blasts come at a time of growing security concern in the world's most populous Muslim nation following terror threats.

Bali is Indonesia's most popular tourist destination, and a favourite for Australians, New Zealanders and Japanese. Although the country as a whole is 85 per cent Muslim, Bali is majority-Hindu.

While a number of regions in Indonesia, and the capital Jakarta, have been hit by violence in recent years, Bali had long been considered a safe haven and spared from any unrest.

"This is a major incident, in terms of the loss of life and the fact that, unless the information changes, it looks like a premeditated attack," a foreign risk consultant in Jakarta said.

The consultant, who declined to be identified, said the effect would be serious for Indonesia. "The impact on Bali will be major. Look at the large number of foreigners in this."

The tourists had been revelling on a typical Saturday night in Kuta Beach.

The photographer said: "I saw one man, who looked Indonesian, whose head had been blown off."

Richard Poore, a 37-year-old visitor from New Zealand who works as a television presentation director, told Reuters he had started to film the scene:

"I saw limbs lying on the ground, I got to the stage where I couldn't film anymore because it made me feel physically ill. I've never seen anything like it in 12 years of reporting."

He said he had tried to enter the Sari club about 20 minutes before the explosion but had been unable to get in because it was too busy, with hundreds inside.

Another tourist said many terrified tourists had left their hotel rooms to sleep in open areas or on the beach. Many were getting ready to leave Bali on the first available flights.

The British Foreign Ministry said there were nine Britons among the wounded, but none so far listed among those killed. The embassy spokeswoman had no details on whether any Americans had died.

Police denied an earlier report that an explosion had gone off in Ubud, another popular tourist town on the island.

Some critics say Indonesia is the weakest link in the US-led war on terror in Southeast Asia, partly because the government has concerns about cracking down on radical Muslim groups for fear of upsetting the vast moderate mainstream.


Feature: Bali bomb blast

More pictures from the scene of the blast

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Feature: Indonesia and East Timor

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