Indonesian security forces say they have uncovered a plot to assassinate president Susilo Bambang Yudhoyono.
They say Indonesian militants captured in recent raids were planning to strike during an Independence Day ceremony in August.
Police say all government officials and state guests attending the event would have been targets.
The authorities say the militants were also planning to kill Western nationals in Jakarta and Java by laying siege to hotels in a Mumbai-style attack.
National police chief Bambang Hendarso Danuri said 58 terror suspects have been arrested and 13 people killed in anti-terrorism raids in the past three months.
He said one of the arrested suspects was set to collect firearms and a grenade launcher from an Islamist stronghold on Mindanao, the main island in the southern Philippines, to be used in the planned attack.
Experts said the recent raids found that terrorists in Indonesia may be shifting their strategy from bombings to military-style shootouts.