A hand grenade exploded Monday in a car just yards from a house owned by the U.S. Embassy, killing one passenger, police said. The embassy denied police reports that the house was the target.

Three other people were in the car when the grenade went off in a residential neighborhood of central Jakarta, police and witnesses said. Police said the driver was detained but two passengers got away.

National police chief Da'i Bachtiar initially told reporters the men were on their way to attack the embassy-owned building. But at a news conference later he called the explosion near the U.S.-owned residence "coincidental."

When asked whether it was an attack against U.S. interests, Bachtiar replied: "We don't know. We are investigating."

He said the driver led police to the city of Bogor, 35 miles south of Jakarta, where more weapons and explosives were found during raids on two homes.

The cache included TNT and 100 bullets, Bachtiar said. In Bogor, police also searched the home of Ahmad Azis, the man killed in the blast, and picked up his wife for questioning, said city police chief Col. Edmon Ilyas.

An embassy statement released Monday said: "The U.S. Embassy is in direct contact with the Indonesian national police and at this time there are no indications that U.S. Embassy properties or U.S. interests were targeted."

The embassy, which remained open Monday, confirmed that it owned several properties in the area.

The embassy had been closed on Sept. 10 for six days due to what U.S. Ambassador Ralph Boyce called a "credible and specific threat" that he suggested was linked to the al-Qaida terrorist network.

Though now reopened, the embassy has cautioned U.S. citizens to stay away. A concrete barricade erected last week runs the length of the complex as a deterrent against bomb attacks.

Indonesia is the world's most populous Muslim country. The government has been cooperating with the U.S.-led war on terror and has come under fire from some radical groups that accuse it of being too close to Washington.

The explosion occurred about 3:30 a.m. in a residential area just yards from the vacant house, said city police chief Col. Edmon Ilyas.

The damage was confined to the car, which swerved and hit a concrete curb, witnesses said.

Residents chased the three survivors, capturing the slightly injured driver and holding him until police arrived. Two other suspects remained at large, Ilyas said.

Police suspect Azis, a resident of Bogor, was handling the grenade went it went off in the front seat. They said the driver, identified solely as Yusuf, carried an identity card issued in Ambon, the capital of Maluku Province.

Maluku, about 1,600 miles east of Jakarta, has been wracked by three years of fighting between Christians and Muslims that has killed around 9,000 people.