0413 GMT March 29, 2020
Authorities received information that Palu had been hit, said Dwikorita Karnawati, who heads Indonesia's meteorology and geophysics agency, BMKG, amid a rapid series of aftershocks.
"The 1.5- to two-meter tsunami has receded," Karnawati told Reuters. "It ended. The situation is chaotic, people are running on the streets and buildings collapsed. There is a ship washed ashore," she added.
BMKG had earlier issued a tsunami warning, but lifted it within the hour.
Amateur footage shown by local TV stations, which could not immediately be confirmed by Reuters, showed waters crashing into houses along Palu's shoreline.
The US Geological Survey put the magnitude of the second quake at a strong 7.5, after first saying it was 7.7.
More than 600,000 people live in Donggala and Palu.
"The (second) quake was felt very strongly, we expect more damage and more victims," Sutopo Purwo Nugroho, BNPB spokesman said.
Indonesia sits on the Pacific Ring of Fire and is regularly hit by earthquakes.
A series of earthquakes in July and August killed nearly 500 people on the holiday island of Lombok, hundreds of kilometers southwest of Sulawesi.