By Kanupriya Kapoor

JAKARTA (Reuters) - Indonesia is "99 percent" sure its most-wanted militant, a supporter of Islamic State known as Santoso, has been killed in a clash with security forces, a senior government official said on Tuesday.

Santoso, who had been designated a "terrorist" by the United States, was believed to have been killed in a gunbattle with the security forces on the island of Sulawesi on Monday, officials said.

"It's confirmed that Santoso ... is dead," the official, who declined to be identified, told Reuters by text message.

"This is 99 percent and was reported to the president."

National police chief Tito Karnavian said earlier he was "90 percent" confident Santoso had been killed. Another militant was also killed in the clash.

Police are collecting DNA samples from Santoso's family in Sulawesi to confirm the identity of the dead militant suspected to be him, Karnavian said.

Santoso, one of the first Indonesian militants do declare allegiance to Islamic State, has been a target of government forces for several years.

His small group, Mujahidin Indonesia Timur, has attracted militants from other parts of Indonesia and several ethnic Uighur Muslims from western China's Xinjiang region.

"This could demoralize Islamic State supporters in Indonesia because Santoso was the symbol of open resistance against the government," Karnavian told reporters at the presidential palace in Jakarta.

President Joko Widodo last year stepped up efforts to capture or kill Santoso, ordering the military to support thousands of police scouring the jungles of Sulawesi. The effort included fighter jets and warships.

Senior police officials said the second militant killed on Monday was believed to be Santoso's right-hand man.

Only about 20 members of Mujahidin Indonesia Timur are believed left in Sulawesi's Poso region, officials say.

Despite his support for Islamic State, officials do not believe Santoso played a role in an attack in Jakarta in January, in which killed eight people including the four attackers, were killed.

That attack in a city-centre commercial district was the first in Indonesia claimed by Islamic State.

Security experts believe Santoso's death would not undermine support for Islamic State in the world's largest Muslim-majority nation.

"It doesn't affect the level of threat in Indonesia, and we may see an intensified effort by Santoso's friends and alumni in Syria to urge followers to take revenge," said Sidney Jones, a Jakarta-based security analyst.

"His death will not affect support for Islamic State or its influence."

The majority of Indonesians are moderate Muslims but militants have operated in the country, and launched sporadic attacks, over the past 15 years. Dozens of militants have been drawn to the Middle East to link up with militants fighting there.

(Additonal reporting by Randy Fabi and Agustinus Beo da Costa; Editing by Robert Birsel)