Police on Indonesia's resort island of Bali stepped up security in tourist hotspots on Monday after five suspected terrorists were shot dead in raids.

"We beefed up security in all places around Bali especially in strategic places such entertainment spots, hotels and malls. What's clear, we are on alert," Bali police spokesman Hariadi said.

"We guarantee maximum security for tourists. They should not be alarmed and should continue to enjoy their holiday," he added.