Sources close to Diddy's family tell TMZ ... Diddy's holding up okay -- given the circumstances -- but he's worrying about his kids from his 10 ft. x 8 ft. jail cell, desperately wanting to speak to his kiddos.

We're told people closest to him are trying to process the situation ... but, they all know they have to be strong for the kids' sakes.

Our sources say the family's leaning on each other for support ... and, turning to God for guidance and strength after his shocking arrest earlier this week.

Diddy has seven children -- Quincy, Justin, Christian "King", Chance, twins D'Lila and Jessie and two-year-old Love.

While Quincy -- who Diddy adopted during his relationship with the late Kim Porter -- Justin, Christian and Chance are all legal adults, D'Lila, Jessie and Love are still just kids. Diddy's remained close to their mothers in the best interest of the little ones.

As TMZ previously reported ... D'Lila and Jessie -- 17-year-old twins -- are staying with a friend of their late mom Kim in Los Angeles while Diddy remains locked up, with no bail set.

It's unclear when Diddy may be able to get in contact with his kids ... he's currently on suicide watch in MDC Brooklyn, where he's been on a strict schedule since his arrest.

He gets one hour of rec time and three showers per week. We know his family and friends can visit periodically ... but, it's unclear how often he can call them.

TMZ obtained exclusive video of his arrest ... showing federal agents taking the rap mogul into custody in a ritzy Manhattan hotel. Prosecutors have charged him with racketeering conspiracy, sex trafficking by force, fraud or coercion and transportation to engage in prostitution.

Justin and Christian came out to support their dad during his bail appeal hearing ... watching as a judge denied his request for bond -- saying prosecutors had proven him to be a danger.