July 17 (Bloomberg) -- Bombs tore through the Ritz Carlton and JW Marriott hotels in the Indonesian capital, Jakarta, today killing at least nine people and injuring 42 others in the country’s worst terrorist attack since 2005.

The blasts, which occurred shortly before 8 a.m. local time, were caused by “high explosives,” said Crisnanda, a police spokesman. A New Zealander was among those killed, the government in Wellington said.

The explosions ripped the façade off the Ritz, blew out windows and showered the street outside the hotels in the up- market Mega Kuningan district with glass and debris. Hours later a car bomb exploded north of the capital, killing two people, TVOne reported.

Indonesia, the world’s largest Muslim country, has been largely free of terrorist attacks since 2005, after a six-year bombing campaign blamed on the Southeast Asian militant group Jemaah Islamiyah left about 280 people dead. President Susilo Bambang Yudhoyono is headed toward a second five-year term, winning 62 percent of votes, according to the latest tally, after improving security and on a pledge to reduce corruption and attract investors to accelerate growth in Southeast Asia’s biggest economy.

Authorities say they have succeeded in weakening Jemaah Islamiyah by using former militants to negotiate with Islamic extremists and convince them to abandon violence.

Embassy Attack

The al-Qaeda-linked group is blamed for an attack on the Marriott in 2003 that killed 12 people, a bomb explosion outside the Australian Embassy in the Indonesian capital in 2004 that killed at least nine and the 2002 and 2005 attacks on the island of Bali that killed more than 200 people.

“We are still seeing that radical clerics preach violence against the West,” Rohan Gunaratna, head of the Singapore-based International Centre for Political Violence and Terrorism Research, told CNN. “The government needs to act and dismantle these structures.”

Since the Marriott blast in 2003, luxury hotels in Jakarta have stepped up security.

The Ritz and Marriott, which are across from each, stop and search vehicles entering the premises and post guards with machine guns in the lobby. People entering and leaving must pass through metal detectors.

PT Bank Danamon Indonesia’s head office is in the area as are the Chinese and Danish embassies.

“The lobby of the Ritz Carlton was destroyed,” said Rubi Purnomo, a spokesman at the Indonesian unit of Newmont Mining Corp. who witnessed the blasts from an adjacent building.

Road Blocks

Ingan Tarigan, a housewife shopping in a market a block away from the hotels, said she heard the blasts. “I tried to find my way back home but the police closed several roads,” she said. “I saw people running.”

Authorities cleared the area of injured people within half an hour of the explosions and cordoned off the site, where there were hundreds of onlookers.

An Australian man received injuries to his leg, Agence France-Presse reported. Australia’s Department of Foreign Affairs is working to determine whether any of the country’s citizens were affected, a spokeswoman said.

The Indonesian rupiah declined the most in two weeks after the explosions. The rupiah slid 0.8 percent to 10,200 per dollar as of 8:45 a.m. in Jakarta, according to data compiled by Bloomberg. The currency reached 10,075 yesterday, the strongest since June 15.

The Manchester United soccer team was scheduled to arrive in Jakarta on July 18 and was booked to stay at the Ritz Carlton, said Azwan Karim, media officer for the Indonesia Football Association.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

Last Updated: July 17, 2009 00:31 EDT