Activity picked up at nearby Mount Merapi, one of the world's most active volcanoes, and one geologist warned that the quake could spark a major eruption.

The 6.2-magnitude quake struck at 5:54am near the historic city of Yogyakarta as most people slept, causing death and damage in many towns.

Buildings collapsed sending panic-stricken people running through the streets. Roads and bridges were destroyed hindering efforts to get the wounded to hospital.

In Bantul, the hardest hit district, rescuers pulled bodies from the rubble as residents dug mass graves for the corpses lying beneath the blazing sun.

Subarjo, a 70-year-old food vendor, sobbed next to his dead wife.

"I couldn't help her," he said. "I was trying to rescue my children ... and then the house collapsed."

President Susilo Bambang Yudhoyono ordered the army to help evacuate victims and arrived in densely populated Central Java province yesterday with a team of Cabinet ministers to oversee rescue operations.

Fourteen hours after the quake struck the number of dead stood at 2,914, said official sources, with more than two-thirds of the fatalities from Bantul. The numbers are rising rapidly said an Indonesian Red Cross spokesman, adding that more than 3,400 people were hurt.

Doctors struggled to care for the injured, many of whom lay on plastic sheets, straw mats and newspapers outside the overcrowded hospitals, some hooked to drips dangling from trees.

"We need help here," said a medic at Bantul Muhammadiyah Hospital, the closest hospital to the epicentre, adding that his hospital alone had 39 bodies. At nearby Dr Sardjito Hospital, health officials tallied 60 dead, but more bodies were lined up in the hall and some family members were taking them home before they could be added to the official toll.

"Our emergency care unit is overwhelmed," said Heru Nugroho.

The quake hit close to the rumbling Mount Merapi and a large burst of hot clouds and debris soon avalanched down its western flank. No one was injured.

A government official said the two events did not appear to be directly related but warned that yesterday's earthquake could still trigger a larger eruption.

International aid agencies have mobilised to bring aid to the island with the United Nations Children's Fund preparing to send about 2,000 tents, 9,000 tarpaulins and 4,000 lanterns along with water tanks and hygiene kits. A UN spokesman said United Nations Disaster Assessment and Coordination teams were ready to help.