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At least five people were killed and 284 were saved from the ferry fire off the Sulvesi Island.
The Indonesian Navy said KM III was removed from the ship on board.
The passengers were seen as they plunged into the water with life jackets to avoid the flames before the flames died out.
In joint rescue efforts, the Indonesian Military Fleet, the Maritime Security Agency (Bakamla) and local search groups were located.
The cause of the fire remains unknown.
