Indonesia's army deployed rubber boats in the capital Jakarta's business district on Thursday to rescue people trapped in floods that inundated much of the city of 14 million people.

The president was pictured standing in water up to his shins — his trousers rolled up — at the palace waiting for the arrival of Argentina's leader on a state visit.

The floods were the most widespread to hit Jakarta in recent memory. Authorities said at least four people were killed and 20,000 evacuated. Many more homes were inundated following around five hours of heavy overnight rain that coursed through rivers already swollen by a long monsoon season.

Few areas in the city were spared, from wealthy suburbs to riverside slums and gleaming downtown business blocks. Offices and schools were deserted and traffic ground to a halt. The international airport was operating normally, but travellers were finding it hard to get there.

"This is horrible," said Yanitha Damayanti, a bank teller stranded downtown. "For the first time in my life, downtown Jakarta has flooded."

Presidential palace floods

The city has long been prone to floods, but successive governments have done little to mitigate the threat.

Indonesian President Susilo Bambang Yodhoyono, second from left, inspects a flooded presidential palace compound in Jakarta. (Reuters)

Deforestation in the hills to the south of the city, chaotic planning and the rubbish that clogs the hundreds of rivers and waterways that crisscross the city are some of the factors behind the floods. The city's vulnerability exposes the country's poor infrastructure even as it has posted impressive economic growth in recent years.

President Susilo Bambang Yudhoyono and the country's foreign minister were pictured standing in water up to their shins at the presidential palace waiting for the arrival of Argentina's President Christina Kirchner, who is on a state visit. The meeting of the two leaders apparently went ahead.

"I have no problem with the palace being flooded, "Yudhoyono said. "The most important thing is the people are protected."

In some places, water levels were up to 2 metres high. Seen from above, the main road through the heart of the city resembled a muddy river. Even as authorities struggled to rescue those trapped and provide them food and shelter, some were thinking of the economic cost.

"This is an extraordinary disaster," said Syamsuddin Basri. "I had to cancel many important business deals."