Six people, including one foreigner, were killed in the country's worst terror attack since 2009. Ten others were injured.
Police also shot dead four attackers, according to Budi Gunawan, Deputy Chief of Indonesian National Police.
"Our nation and our people should not be afraid, we will not be defeated by these acts of terror, I hope the public stay calm," he told local broadcaster MetroTV.
At present, no group has claimed responsibility for the attack.
Who could be behind it?
ISIS has a presence in Indonesia
, where it has long sought to establish a "distant caliphate" in Indonesia, according to the Australian Attorney-General George Brandis.
"ISIS has identified Indonesia as a location of its ambitions," Brandis told The Australian newspaper
Up to 700 Indonesians have traveled to Syria
in recent years to fight with anti-regime forces, with the majority allying themselves with ISIS, according to the Indonesian government.
Indonesia fighters have also appeared in ISIS propaganda
Indonesian police said that the perpetrators of a foiled bomb plot late last year were
"influenced by ISIS."
Speaking in the wake of Thursday's attack, Clarke Jones, a counterterrorism expert at the Australian National University, said that such an incident is not a great surprise.
"There was warning some weeks and even months ago that Indonesia was likely to experience some sort of attack," he told CNN.
Indonesia has long struggled with domestic terrorist groups, particularly Jemaah Islamiyah, which claimed responsibility for 11 attacks between 2000 and 2010, including the deadly 2002 Bali bombings, which left more than 200 people dead and hundreds injured, many of them tourists.
Smaller groups have also claimed responsibility for attacks and bombings across the country, including the 2005 beheading
of three Christian teenagers by Muslim militants in the Poso region of Sulawesi.
, which has been linked to Al Qaeda, has largely replaced Darul Islam as Indonesia's deadliest local terrorist organization. The group aims to establish a regional Islamic caliphate in Southeast Asia and has also been active in Thailand, Malaysia and the Philippines.
However, Jemaah Islamiyah's capabilities have been steadily eroded
by a concerted counter-terrorism effort since 2009.
Indonesia has invested heavily in counter-terrorism, establishing the elite special forces unit Detachment 88, which has received support and training from the U.S.
, and has been credited with greatly reducing the number of attacks since 2009.
According to a report
by the Jamestown Foundation, in recent years Indonesia has been "widely viewed as a counter-terrorism success story as the threat from al-Qaeda-linked or -inspired jihadist groups declined dramatically."
"Unfortunately, the transnational pull of the conflicts in Syria and Iraq, and the emergence of the Islamic State, risk undermining Indonesia's counter-terrorism successes," the report warns.