Violent mass demonstrations have challenged the image of Indonesia as practising a moderate form of Islam.
Indonesian police say three suspects who were planning a suicide bombing on Christmas Day or New Year’s Eve were killed when a gun battle erupted during a raid on the outskirts of the capital Jakarta.
It was the second imminent attack to be foiled in less than two weeks.
After Wednesday’s raid, police said the suspects – supporters of the Islamic State of Iraq and the Levant – had planned to stab officers at a traffic post and then detonate a “large, homemade” bomb as crowds gathered.
“The intention was for a suicide bomb,” national police spokesman Rikwanto, who like many Indonesians uses only one name, told a news conference.
“Every year, Christmas and new year events are the target of terrorists to carry out amaliyah,” Rikwanto said, using an Arabic term to describe suicide bombings in armed group circles.
Police said a total of five bombs were found at the house in the South Tangerang suburb.
Television footage showed a bomb squad officer wearing a blast-resistant suit entering the house as locals watched from behind a police line.
Rikwanto said one suspect was captured alive after the firefight.
The raid was the latest in a series over recent weeks that police say have disrupted bomb plots, raising concerns that homegrown attackers in the world’s largest Muslim-majority nation are getting bolder in their attempts to engage in violence.
Police said earlier this week at least 14 people were being interrogated over suicide-bomb plots targeting the presidential palace in Jakarta and an undisclosed location on Java island.
Both involved a female suicide bomber.
President Joko Widodo commended security forces for preventing attacks and called on the public to be vigilant against the spread of “radicalism”.
Indonesia has suffered several major strikes over the years, the worst of which was the 2002 bombing on the holiday island of Bali that killed 202 people, many of them foreigners.
That attack led to Western help and funding for Indonesia to develop an elite counterterrorism unit, which has been effective in stamping out armed-group cells.
Authorities, however, now worry about a resurgence in violence inspired in part by the ISIL group.
A gun-and-bomb assault in the heart of Jakarta in January killed four people and was the first attack in Southeast Asia claimed by ISIL.