The earthquake's epicenter was in the Molucca Strait near the island of Mangole about 1200 miles east of Djakarta. This is one of the more remote areas of Indonesia. The population of the island is about 38,000. There was also substantial damage but no reported deaths on the neighboring islands. News stories from the region report 25 dead. A timber factory collapsed, at least partially into the ocean, with an estimated 200 people inside. Many houses are also reported to have slid into the sea. Rescue efforts are continuing. Thousands of people are reported camping out in fear of aftershocks, which are occurring, with magnitudes up to 5.8. Many people fled to higher ground in case of a tsunami. However, there has been no tsunami. Many buildings have been reported to have been destroyed. Landslides have cut communications with much of the islands near the epicenter. There are no hospitals on the affected islands, however there have been some airlifts of supplies in and injured people out.
Indonesia is located in one of the most seismically active areas of the world. Earthquakes here are caused by the subduction of the Eastern Pacific crust under the Asian plate. This action not only causes frequent earthquakes, but is responsible for the volcanic action that created these islands. As the ocean crust dives under the continental plate, it is heated to the melting point and rises as magma to the surface where it creates the volcanic island arcs so common in this area. See the Plate Tectonics page for more information on these processes
See these links for news stories.