JAKARTA, March 5 (Reuters) - About 200 Buddhist students held a rally outside an outlet of the international franchise Buddha Bar in the Indonesian capital on Thursday, accusing it of defaming their religion.

Jakarta is the first city in Southeast Asia to host a Buddha Bar, the hip Paris-based franchise of restaurant/lounges.

"It is impossible to put the exalted name (Buddha) side by side with the word 'bar', which is associated with a place for alcohol. That is defamation of religion," said Eko Nugroho, a protester from a group calling itself the Students Alliance to Reject Buddha Bar.

During the peaceful protest, the group prayed with flowers and incense outside the bar that opened late last year in the plush Menteng area of Jakarta and which houses a giant gold Buddha statue on the upper restaurant floor of the bar.

Some held up banners saying "Strip off Buddhist symbols from Buddha Bar" and called for the bar to be shut.

A member of the bar staff said she was not aware of any plan to change the name or alter the interior of the venue. "Buddha Bar is open as usual," said the bar staff, who gave her name as Echi.

The congested Indonesian capital of about 10 million people has seen an increasing number of slick nightlife venues open in recent years.

Secular Indonesia is predominantly Muslim, but also has sizeable Christian, Hindu and Buddhist communities.

In the past, supporters of hardline Muslim groups have smashed up bars and nightclubs for opening during the Ramadan fasting month.

(Reporting by Adi Kurniawan and Benny Siahaya; Writing by Olivia Rondonuwu; Editing by Alex Richardson)