A powerful undersea earthquake that struck off the Indonesian islands of Sumatra and Java has killed at least one person and briefly displaced more than 1000 coastal-dwellers who feared a tsunami.

The mighty earthquake off Indonesia’s coast triggered mass panic, with coastal residents evacuating to higher ground following an urgent tsunami warning.

The magnitude 7 quake – later downgraded to 6.8 – struck underwater off the islands of Sumatra and Java and was felt as far away as the capital Jakarta where buildings swayed.

Residents along the Banten Coast, the western-most part of Java, were urged to “immediately evacuate to higher ground” as people relived the fear that has become an intermittent occurrence in the region.

After two hours of mass panic about being washed away by waves that authorities warned could be three metres, the tsunami warning was eventually lifted.

The powerful earthquake was similar in magnitude to one that devastated the city of Palu on Sulawesi Island in September when the ensuing tsunami wiped out 2,000 people.

Another 400 people were killed when the volcano Anak Krakatau blew its top in December and triggered a tsunami in an area near the current quake.

At Carita beach in Banten, which was affected by the Anak Krakatau quake, a resident described the alarm in the area following the latest tsunami warning.

“We are panicking a lot,” Sandi, a resident of Carita beach, told Metro TV by telephone.

The US Geological Survey put the epicentre of Friday’s quake in the Indian Ocean, about 227km from Teluk Betung city on Sumatra, with an initial magnitude of 7 that was later lowered to 6.8.

There appeared to be no major damage or casualties but strong tremors were felt in Jakarta, prompting people to run out of highrises and office buildings.

“It was so scary,” said Gustiani Pratiwi, carrying two children out of an apartment block in Jakarta after feeling the quake strongly.

TV footage showed passengers at Jakarta’s international airport rushing out of a terminal building but authorities later said the airport was operating normally.

The quake was also felt in other cities such as Yogyakarta on Java island.

One social media video showed panicked guests dashing out past a hotel swimming pool on Java island.

The geophysics agency warned of a tsunami risk in southern parts of Pandeglang and Panaitan island in Banten province, and Lampung in Sumatra.

Indonesia’s disaster mitigation agency said on Twitter that residents near coastlines at risk should “immediately evacuate to higher ground” before the warning was cancelled two hours later.

Indonesia is situated on the so-called Pacific Ring of Fire, which is frequently hit by earthquakes and sometimes accompanying tsunamis.

A heightened fear of tsunamis was triggered more than a decade ago when a explosive 9.5 quake set off a massive wave that killed around 226,000 people on Boxing Day.

-with AAP