Twenty-five people were plucked to safety but about another 75 were unaccounted for after the boat, carrying people from Lebanon, Jordan and Yemen, went down off the main island of Java, police said.
Warsono, a police official in Cianjur district on Java, said that local people found the asylum seekers’ bodies floating in an estuary on Friday morning.
“Local people found 20 dead bodies floating in the water, most of them are children,” he said. “The number of deaths may increase.
“Local people said their boat had broken into several pieces,” he added, although he did not know when the accident happened.
The official, who like many Indonesians goes by one name, added that the boat was believed to have been carrying 120 people when it went down.
He said they were asylum-seekers heading to Christmas Island.
An official with the Indonesian search and rescue agency, BASARNAS, confirmed to AAP on Friday that a rescue operation was ongoing, while warning that the death toll was expected to rise.
The official said early indications were that 25 people had survived, and had been taken to a school near the city of Cianjur.
“Local police are saying that 25 people have been rescued,” he said.
“But the casualties might add up.”
He said the search was ongoing.
Four boats had been deployed to search for survivors but the operation was postponed until Saturday morning.
The official said authorities were struggling to locate where the vessel had sunk.
BASARNAS was advised of a boat in distress at about 3pm local time on Friday, adding that the vessel had started taking on water off the coast of West Java, near the Sukabumi region, earlier in the day.
The BASARNAS official said Indonesian authorities had been alerted to the incident by the Australian Maritime Safety Authority (AMSA).
It’s believed to be the first fatal attempted asylum-seeker crossing under the coalition government, and comes after another group of 44 asylum seekers were rescued by an Australian navy vessel in the Sunda Strait on Thursday.
The group rescued on Thursday, which included four children, were offloaded at Indah Kiat port at Banten in the western part of Java at about 8am local time on Friday.
The two incidents come amid a ramping up in tensions between Canberra and Jakarta over the asylum seeker issue, and days ahead of talks in Jakarta between Australian Prime Minister Tony Abbott and Indonesian President Susilo Bambang Yudhoyono.
Mr Abbott and President Yudhoyno will meet on Monday with asylum seeker policy expected to be at the top of the agenda.