Bombs ripped through two luxury hotels in the heart of Indonesia's capital on Friday, killing eight people and wounding dozens in an attack the president said would damage confidence in Southeast Asia's biggest economy.

Suicide bombers struck the JW Marriott hotel and close-by Ritz-Carlton, both popular with visiting international businessmen and boasting some of the tightest security in Jakarta, as guests sat down for a breakfast power meeting.

A visibly upset President Susilo Bambang Yudhoyono, re-elected this month on the back of improved security and a healthier economy, said the bombings were the act of a terrorist group bent on damaging the country.

I am sure most of us are deeply concerned, feel very sorry and are crying silently, like the way I am feeling, he told a news conference, adding the perpetrators were laughing and cheering with anger and hatred.

They do not have a sense of humanity and do not care about the destruction of our country, because this terror act will have a wide impact on our economy, our business climate, our tourism, our image in the world and many others.

Police said the bombers had checked in to the Marriott as paying guests on Wednesday and had assembled the bombs in their room. A third bomb was found and defused in a laptop computer bag on the 18th floor.

Room 1808 had become their post since the 15th, National police chief General Bambang Hendarso Danuri told a news conference, adding two suicide bombers had been killed in the blasts.

Indonesia's TVOne showed closed-circuit television footage of a man they said was the Ritz-Carlton's suspected suicide bomber. He was wearing a baseball cap and pulling a wheelie-bag through the lobby.


Indonesian financial markets fell after the blasts, with the rupiah down one percent before state-controlled banks stepped in to support, traders said, and it ended at 10,200 to the dollar. Indonesian stocks fell as much as 2.7 percent before paring loses and closing down 0.6 percent.

International reaction to the bombings was swift.

U.S. President Barack Obama, who spent four years living in Jakarta as a child after his mother married an Indonesian, called the attacks outrageous.

These attacks make it clear that extremists remain committed to murdering innocent men, women and children of any faith in all countries, the White House said in a statement.

While suspicion was likely to fall on the Jemaah Islamiah (JI) militant group, blamed for a previous Marriott attack as well as bombings on the island of Bali in 2002 that killed 202 people, police chief Danuri said it was too early to speculate.

We are working on it. We are conducting studies at the crime scene, so we cannot rush things, he said.

The group, which wants to create an Islamic state across parts of Southeast Asia, was blamed for a string of attacks until 2005, but many militants have since been arrested.

According to police, the casualties included citizens of Indonesia, the United States, Australia, South Korea, the Netherlands, Italy, Britain, Canada, Norway, Japan and India.

Many of those hurt in the Marriot blast were attending a high-powered business breakfast organized by the consulting firm CastleAsia.

Tim Mackay, chief executive of cement maker Holcim Indonesia and one of 19 executives attending, was killed in the blast.

The Manchester United soccer team canceled the Jakarta leg of an Asian tour. A Ritz-Carlton employee said the team had been due to stay at the hotel ahead of a game in Indonesia early next week.


Witnesses said the bombings at the Marriott and the Ritz-Carlton were minutes apart and it appeared both had occurred inside the hotel restaurants during breakfast.

It was very loud, it was like thunder, it was rather continuous, and then followed by the second explosion, said Vidi Tanza, who works near the hotel.

Alex Asmasoebrata was jogging near the hotels at the time of the blasts.

There was a smell like firecrackers, and then five minutes after that, there was an explosion at the Ritz-Carlton, he said, adding that he saw one person whose leg had been severed and two suffering from burns. All three were foreigners.

An Australian security report on Thursday had said Jemaah Islamiah was poised to strike again. Authorities in neighboring Malaysia, where the group also has roots, said they were stepping up security at government buildings, shopping malls and hotels.

The Australian Strategic Policy Institute said leadership tensions in Jemaah Islamiah and recent prison releases of its members raised the possibility that splinter groups might now seek to re-energize the movement.

Sidney Jones, a Jakarta-based expert on Islamic militants at the International Crisis Group, said Jemaah Islamiah as an organization did not appear to be responsible.

It's more likely to be a splinter group than JI itself, which doesn't mean you couldn't have JI members but it's very unlikely to be JI as an organization behind this attack, said Jones.

(Additional reporting by Michael Perry in Sydney, Harry Suhartono in Singapore; Writing by David Fox and Sara Webb; Editing by Nick Macfie)