The spectre of terrorism returned to haunt Algeria today as at least 43 people were killed and 38 injured when a car packed with explosives rammed into a police academy where university graduates were lining up to take an entrance exam.

The suicide attack was a brutal reminder of Islamic violence which plunged the country into civil war and cost between 150,000 and 200,000 lives in the 1990s.

In what appeared the latest sign of a terrorist resurgence in North Africa, a suicide bomber smashed into the entrance of the Issers police academy east of Algiers as candidates waited to be called inside.

"It's a bloodbath," said an official as police sealed off the district amid fears of repeat attacks.

An elderly man wept as he told how his son had died minutes before he was due to sit the examination, which is a gateway to elite units of the Algerian gendarmerie, the paramilitary police.

"It's utter carnage," he said. "May God punish them for the crime they have committed against these youngsters, and their country."

Yazid Zerhouni, the Algerian Interior Minister, visited the scene and described the attack "an act against Algerians."

The explosion left a crater several metres wide, devastated the academy, destroyed shops and homes and scattered human remains across the road.

It follows a series of terrorist attacks claimed by al-Qaeda Organisation in the Islamic Maghreb, an Algerian movement formerly known as the Salafist Group for Preaching and Combat, which joined forces with Osama bin Laden in 2006.

The group was formed by Islamic radicals who sought to overthrow the Algerian State in a war marked by repeated civilian massacres between 1991 and 2002.

It was driven on to the defensive after Abdelaziz Bouteflika was elected president in 1999 and launched tough military action and an amnesty for fighters who gave up their arms.

There were hopes that his policies would end terrorist activity all together. But that prospect appears increasingly unlikely amid signs that al Qaeda is determined to re-ignite violence in Algeria as part of an attempt to unsettle the whole of north Africa and notably Morocco.

In December last year, 41 people died in a suicide bombing which targeted Government buildings and United Nations offices in Algiers.

Over the past month, at least 35 people have been killed in five separate attacks, mainly on the security forces

In another sign that al Qaeda is seeking to awaken Algeria's bloody history, the courts handed down 218 death sentences in absentia to terrorists on the run in the first six months of this year.

The former French colony is fertile ground for unrest. Although oil-rich, it is handicapped by unemployment - officially 14 per cent but probably much higher, according to the International Monetary Fund - and a critical housing shortage.

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