Indonesian police were engaged in an armed standoff with gunmen Saturday in a suspected hideout of alleged Asian terror mastermind Noordin Mohammed Top, a spokesman said.
Shooting erupted after crack counter-terrorism police surrounded a house in rural Central Java as part of investigations into last month's twin suicide bombings on hotels in the capital Jakarta, he said.
"There was shooting between the special detachment team and the people inside the house," spokesman Nanan Soekarna said.
"This house was our target," he added.
The siege began around 4:00 pm (0900 GMT) Friday in Beji village, Temanggung regency and sporadic shooting could still be heard after midnight.
Up to four suspected Islamist militants were holed up in the squat, single level house, Soekarna said, without confirming media reports that police believed Noordin was among the occupants.
He said two people "connected to the group in the house" had been arrested, but gave no further details.
"The police right now are still trying to besiege the house. We suspect that there are about three or four people inside," he told AFP.
Malaysian Islamist Noordin is one of the most wanted terror suspects in Asia.
He is blamed for multiple suicide bombings in Indonesia which have killed more than 40 people since 2003.
Noordin was a member of the Jemaah Islamiyah regional terror movement responsible for the 2002 Bali bombings which killed more than 200 people, but split around 2003 to form his own militant group, analysts said.
He is wanted over suicide bombings on the JW Marriott in Jakarta in 2003, the Australian embassy in 2004 and tourist restaurants in Bali in 2005.
Friday's raid follows twin suicide attacks on the Marriott and the adjacent Ritz-Carlton hotel in Jakarta on July 17 which killed seven people including three Australians, as well as the two bombers.
An Internet blog purportedly signed by Noordin has claimed responsibility for the hotel attacks, but the authenticity of the statement has not been confirmed.
Noordin and his followers accuse the United States and its allies of oppressing Muslims around the world and justify their attacks in terms of global jihad, or holy war, to protect Islam.
Police have come close to arresting Noordin several times in the past and have captured or killed some of his closest associates during the six-year manhunt.
Source: AFP Asian Edition