A huge seabed earthquake has shaken remote islands of eastern Indonesia.

Seismologists say the shocks -- measured at seven-point-six on the Richter scale and centred near the island of Taliabu, to the east of Sulawesi -- had the potential to cause severe damage and possible seismic sea waves.

Indonesian police in the town of Mangole on Taliabu said at least five people had been killed and more than twenty injured; many homes had been destroyed or had fallen into the sea.

Rescuers were searching the ruins of a timber factory employing hundreds of workers.

People were said to be moving from coastal areas to higher ground in fear of giant waves.