National Police Chief General Da'i Bachtiar said a man sitting in the front passenger seat of the van was killed and the driver was injured in the blast at around 3.30 am (2030 GMT Sunday).

"The grenade that blew up in Teluk Betung Street was to be thrown at the unoccupied building of the US embassy, but it blew up inside the car," said Bachtiar, quoted by the Detikcom online news service.

The slightly injured driver of the van was arrested, but two other passengers fled the scene in an upscale district near the city centre.

The incident comes just one week after US diplomatic missions in Indonesia re-opened following a six-day shutdown because of fears the al-Qaeda network was planning truck bomb attacks against US missions in Southeast Asia.

Police in the nearby area of Gunung Putri in the southern outskirts of Jakarta, where the injured driver lives, said they have arrested three other men in three different houses.

A home-made bomb, two smoke bombs produced by the state weapons company Pindad and 20 nine-millimetre handgun bullets were found in the raids, a policeman told Nampa-AFP by telephone, adding that they were carried out based on information given by the arrested driver.

Bachtiar said police believed the US residence was the target, although the driver had told them that the four men had been planning to collect a debt at a house nearby.

The explosion caused the van to swerve into an electricity pole near the US embassy house, but there were no signs of substantial damage to nearby buildings.

A US State Department official in Washington said the residence was unoccupied and that there was no evidence yet to prove that the building was being targeted.

Jakarta police spokesman Chief Commissioner Anton Bachrul Alam said it was too early to know whether the explosion was linked to the recent bomb threats against US interests.

The US embassy in Jakarta and the US consulate in the city of Surabaya reopened a week ago after a security threat linked to al-Qaeda.

Both missions were closed after a "credible" security threat around the anniversary of the September 11 attacks on New York and Washington.

Reports said the United States feared al-Qaeda agents were planning to truck-bomb US embassies in South East Asia on September 11.

The incident comes amid growing concern in Washington that Indonesia, the world's most populous Muslim nation, may be home to considerable numbers of sympathisers or members of al-Qaeda.

Last week American residents in Indonesia received another warning from their embassy, this time over "credible threat information that Westerners in the Yogyakarta area may be targeted for violence in the immediate future."

The warning notice did not mention the source of the threat.

Yogyakarta is the headquarters of the Indonesian Mujahedin Council, an umbrella organization which advocates Islamic law and is chaired by Abu Bakar Ba'asyir, who is wanted by neighbouring Singapore.

vt/bs/th Nampa-AFP WEB story ENDS (NAMPA 230628)

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