Jewel Topsfield, Jakarta – The Australian government has issued an updated travel warning to Indonesia as three suspected terrorists were killed after a bomb was thrown at police officers during a raid of a house about 25 kilometres south-west of Jakarta.

The raid came as DFAT's smart traveller website warned that Indonesian authorities continued to arrest terrorists allegedly in the advanced stages of attack planning.

Jakarta Police spokesman M. Iriawan said police had been told a terror attack would be carried out on Christmas Day targeting a police post. "The information we received was there were three bombs ready to explode inside the house – pipe [bombs inside] three backpacks," he said.

The alleged terrorists were believed to be linked to arrests in the east Jakarta suburb of Bekasi earlier this month over a plot to attack the presidential palace in Jakarta using a pressure cooker bomb.

This plot sent chills through Indonesia because one of the women arrested – Dian Yulia Novi – had been tasked with suicide bombing, indicating militants were now recruiting women to mount the deadly attacks.

Mr Iriawan said Dian had provided information leading them to a man named Adam who was arrested following a raid at a home in South Tangerang at 8am on Wednesday morning. Adam told police three of his friends planned to stab a police officer.

"Once police and people gathered at the crime scene, they would come and blow up a suicide bomb," National Police spokesman Rikwanto said.

He said the three suspected terrorists were killed after one of them threw a bomb at a police officer during a raid on a rental property in Setu in South Tangerang at 9.45am on Wednesday morning. "Thank God it did not explode and action was taken to stop them," he said.

The Indonesian counter-terrorism force Detachment 88 had seen a big bomb but did not wish to trigger it and so called the bomb squad.

Mr Rikwanto said Christmas and New Year events remain the target of terrorists. "It's like this every year," he said. "Police keep following their tracks to avoid end of year events being disturbed by them."

In an updated travel warning released on December 21, DFAT warned terror attacks could occur anywhere at any time in Indonesia, including in Bali.

"Indonesian authorities continue to arrest terrorists who have allegedly been in the advanced stages of attack planning," it said. "The terrorist threat level in Indonesia remains high."

Police spokesman Awi Setiyono later said one of the alleged terrorists who had been killed – Omen – was a convicted murderer who had been recruited by an ex-terrorist convicted of the Myanmar embassy bombing in 2013.

He said the other two – Irwan and Helmi – were members of Jemaah Anshar Daulah (JAD), which the National Counterterrorism Agency recently said was the most dangerous terrorist organisation in the country. JAD is led by firebrand cleric Aman Abdurrahman, one of Indonesia's most influential jihadist ideologues and a vocal promoter of Islamic State.

The group has been linked to a number of terror attacks in Indonesia including the attack in January near Sarinah shopping mall in Central Jakarta, which left eight people dead. He is currently serving a nine-year prison sentence for terrorism on the penal island of Nusakambangan.

President Joko Widodo expressed his highest appreciation to Detachment 88 and other police units for finding the bomb before it had time to explode.

"I think we should be grateful and we hope people stay alert to their surroundings and report anything to the security apparatus," he said. "We hope all people participate in guarding this nation from terrorism and radicalism." (With Karuni Rompies and Amilia Rosa)

Source: http://www.smh.com.au/world/three-alleged-terrorists-shot-dead-in-indonesia-20161221-gtfvrg.html