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The quake struck between the islands of Manado and Ternate. Tsunami warnings have now been lifted.
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The quake, which struck at 06:48 local time (22:48 GMT) at a depth of 35km, sparked tsunami warnings which have since been withdrawn.
A 70-year-old woman in North Sulawesi died after being crushed by building debris, and another person broke their leg after jumping off a building, Indonesia's national news agency Antara reported.
While the region experiences high levels of seismic activity, some residents told the BBC this was one of the strongest earthquakes they have felt in at least the past six years.
The Hawaii-based Pacific Tsunami Warning Center initially warned that tsunami waves less than 0.3m (1 ft) "were possible" along the coasts of Guam, Japan, Malaysia, Papua New Guinea, the Philippines and Taiwan. The tsunami alert was lifted after two hours.
Journalist Isvara Safitri, who lives in central Manado, recalled how furniture in her room shook for several seconds.
"It was really strong... My head even felt dizzy," Safitri told BBC Indonesian.
Even the roads outside the house were shaking, she said, adding that the earthquake "feels like the strongest" she's experienced over the past six years.
Yayuk Oktiani, who lives in Bitung, a city on the north-eastern coast of Sulawesi, said she often experiences tremors, "but they're never as strong as this one".
Oktiani was at the market when "everything started shaking". Several stores experienced power outages and as the tremors got stronger, people fled, she told the BBC.
She headed straight for her child's school, which is located "very close" to the sea.
"The situation there was chaotic... The teachers immediately told parents to bring their children home, even though they had only just arrived," she told the BBC.
In Ternate, resident Budi Nurgianto said the walls in his house vibrated for what felt like more than a minute. He rushed outside, into a scene of panic.
"The
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