Witnesses said they saw Sheila von Wiese-Mack, 62, and her daughter Heather Mack, 19, arguing in the lobby of the St. Regis hotel.
Mack and her boyfriend, Tommy Schaefer, were arrested on suspicion of von Wiese-Mack's murder last week.
"So from witnesses in the St. Regis front office there was an argument between the mother and the child," police spokesman Ida Bagus Sarjana said. "The information I have is only that there was an argument -- only that information."
Police said Mack and Schaefer hailed a taxi at the St. Regis on the morning of August 12, loading a silver suitcase into the trunk before reentering the hotel. When they didn't reappear after two hours, the driver spoke to hotel management and they opened the suitcase to discover von Wiese-Mack's body inside.
Mack and Schaefer were located asleep at a hotel about 6 miles away, claiming they had been able to escape attack by an armed gang, on whom they blamed von Wiese-Mack's murder.
The Chicago-based couple's U.S. lawyer was headed for Indonesia, and had advised them not to answer any more questions or give statements until he arrives, the police appointed lawyer, Haposan Sihombing, said.
Von Wiese-Mack's body was flown to the U.S. Tuesday to be examined by the FBI. An Indonesian forensic team found numerous wounds on the body, including those made from blunt objects and many defensive wounds, which they said showed von Wiese-Mack struggled hard against her assailant. She died of asphyxiation, and suffered a broken neck, they said.
Calls for Mack and Schaefer to face the death penalty -- carried out by firing squad in Indonesia -- are complicated by the revelation that Mack is approximately two months pregnant.
The couple has not yet been charged with a crime. In the Indonesian criminal justice system, suspects may be held for some time without charges being filed, which likely won't happen until after the investigation is complete and trial begins.
Von Wiese-Mack's brother, William Wiese, told the Chicago Tribune the FBI would conduct an autopsy at Dover Air Force Base in Delaware.
Police records show a history of violent conflict between the mother and daughter, and that von Wiese-Mack refused to have her daughter hospitalized despite "living in fear."
"I think she was hoping it would be a fresh start for her and Heather," Wiese said of his sister, adding that he suspected Schaefer showed up in Indonesia without von Wiese-Mack's knowledge.
"She was such an optimist," he said. "She was forever trying to help that girl."