According to Admiral Franky Pasuna Sihombing, head of the Manado naval base, the KM Barcelona 5 passenger ship caught fire at noon on July 20 while en route to Manado, the capital of the Northern province of Sulawesi.
The ship was on its way from Melonguane port in the province's Talaud Islands.
A coast guard ship, 6 rescue ships and a number of steam boats were deployed in the rescue operation.
Admiral Sihombing said the crew rescued many passengers and took them to nearby islands. Local fishermen have also rescued some survivors wearing life jackets drifting on rough seas.
Search and rescue continues, although there have been no immediate reports of those still missing.
Previously, authorities announced that 5 people had died, but the National Search and Rescue Agency adjusted this number to 3 on the morning of July 21 after 2 passengers were initially reported dead and were rescued at the hospital, including a 2-month-old baby.
The fire that broke out at the rear of the ship was extinguished within 1 hour.
The initial list of people on the ship only recorded 280 passengers and 15 crew members. However, the national rescue agency confirmed that 568 people were rescued, 3 bodies were found.
According to Mr. Sihombing, the number of passengers on a boat other than the passenger list is common in Indonesia. This difference could contribute to accidents and complicate search and rescue efforts.
The capacity of the crashed passenger ship was 600 people.
Indonesia is an archipelago of more than 17,000 islands, so ships are a popular means of transportation.
On July 14, an 18-man speedboat in Indonesia capsized during the storm. All passengers on the ship were found and rescued the next day.
In early July, a ferry sank near Bali Island, killing at least 19 people and leaving 16 others missing. The 2-week search mobilized more than 600 rescue workers, 3 naval ships, 15 boats, a helicopter and many other vehicles.