Up to 2,000 people have been killed when buildings collapsed after a massive earthquake off the coast of Indonesia that sparked panic around the Indian Ocean, the country's vice president said.

The quake, which occurred three months after the December 26 tsunami disaster that left 220,000 Indonesians dead and missing, caused extensive damage on the island of Nias, a popular surfing destination west of Sumatra.

"Maybe there are one to two thousand people who have died according to the early reports from there," Vice President Yusuf Kalla said in an interview with the BBC.

The quake, which hit 8.7 on the Richter scale, struck close to the epicentre of last year's magnitude-9.0 shockwave, but did not trigger any ocean upheaval.

But according to Agus Mendrofa, a deputy district chief on Nias, there was extensive damage on the island with at least 80 percent of all multi-storey buildings in the main city of Gunung Sitoli destroyed.

Indonesian officials issued a tsunami warning after Monday's undersea quake which struck around shortly after some 245 kilometres (150 miles) southwest of the city of Medan. They gave the all clear three hours later.

Mendrofa said that many people injured in the quake had been unable to receive medical treatment as a power blackout had hit the main hospital while doctors and nurses had joined others fleeing for higher ground.

Herman Laia, the head of the environment office in the south of Nias, said almost 95 percent of buildings there were destroyed.

"Power poles fell and roads were broken. Electricity and fixed telephone lines are dead. Thousands of people have fled to the hills," he told Elshinta radio.

"The most pressing need is food. Houses are in ruins and there are no restaurants. We haven't eaten anything since last night," he said.

The earthquake, which was felt in neighbouring countries where it also prompted tsunami alerts, caused minor damage in Sumatra's largest city Medan and power outages across the island, including the devastated Aceh region.

In Aceh, where the trauma of last year's disaster is still fresh in the minds of many, there was pandemonium as people fled their homes, running or driving to reach higher ground.

Similar scenes were reported in coastal cities and towns across Sumatra.

Police in Aceh urged people to remain calm while local mosques broadcast appeals over their loudspeakers, saying: "Don't panic, there is no tsunami".

Sturdily built mosques were among the few buildings that survived the wrath of last year's tsunami in Aceh.

PHOTO CAPTION

An employee points at the graphic of the strong earthquake that rocked Sumatra island at Meteorology and Geophysics office in Jakarta, Indonesia, Tuesday, March 29, 2005. (AP)