At least seven people were killed in a series of explosions and gunfire at a busy shopping and business area of the Indonesian capital, last Thursday.
Police chiefs in Indonesia have claimed militants behind the attacks received funding via an Indonesian fighting alongside the Islamic State group in Syria.
Speaking to Catholic charity, Aid to the Church in Need, Father Franz Magnis-Suseno said: "This attack should serve as an alarm bell for all Indonesians, and above all for Muslims.
"They need to recognise the danger of terrorism."
He also rejected suggestions the reported growth of support for Islamic State posed an immediate danger to Indonesia.
"If the government succeeds, as it seems to be doing, in offering real prospects of a better future and reining in the rampant corruption, then young Indonesians will not go looking for alternatives such as ISIS," he said.
Aid to the Church in Need says Indonesia has been known for religious pluralism in recent years but there has also been a big rise in religious intolerance which the group says has been fuelled by radical Islamism.
Fr Magnis-Suseno warned against underestimating the problem of extremism and acknowledged there are numerous terrorist organisations within Indonesia.
"In reality, these groups are very much divided among themselves and cannot be lumped together or form a common front," he said.
"The authorities are confident of being able to depend on a strong anti-terrorist strategy, which has been in operation since 1988."