Police spokesman Nanan Sukarna said officers believed alleged Malaysian militant leader Noordin Mohammad Top and two or three of his followers were inside, but could not immediately confirm their fate.
TV One reported that officers outside the house had taken off their helmets and were shaking hands with each other, suggesting all those inside had either been killed or captured.
Noordin is suspected in last month's attacks on two luxury hotels in the capital, Jakarta, as well as in four other major bombings in Indonesia since 2002, including nightclub bombings on the resort island of Bali that year that killed 202 people, mostly foreigners.
