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"It was laden with very heavy explosives but due to our spacing and our security measures, Allah has been very kind," said Major General Saleem Nawaz, a commander of Pakistan’s paramilitary Frontier Constabulary told Dawn News television. The police "sacrificed their lives and the Chinese friends were absolutely safe."

Television pictures showed several damaged cars and buses rammed into one another among a tangle of bricks and clothing.

Police leaders agreed that Muslim extremists were to blame. Tariq Masood Khosa, police chief of Baluchistan, said: "We believe it is part of the recent attacks carried out by Islamist militants."

Separately, seven people including several police officers died in a car bomb attack on the police training centre in the far northwestern city of Hangu, a known centre of Islamist militant activity. The bomber rammed the gates of the college as a group of young recruits was arriving.

So far more than 160 people have been killed in the last week in violent revenge attacks by Islamic extremists after government forces brought a bloody end to the siege of the radical Red Mosque in Islamabad. According to official estimates 102 militants, clerics and religious students died when the mosque compound was stormed by special forces.

Most of the revenge attacks have been targeted against soldiers in the lawless tribal areas in the north of the country, although there was also a suicide bombing on a crowd of civilian demonstrators in the capital, Islamabad.

President Pervez Musharraf of Pakistan has said that he had no intention of declaring a state of emergency to counter the growing insecurity, and gave assurances that elections due later this year would go ahead as planned.

Karachi’s stock market had gained almost 40 per cent since the beginning of 2007, but the escalating violence has lopped close to 6 percent off the market’s main index in the past two days.

A senior cleric in Karachi voiced fears of civil war if Musharraf stepped up his fight on militants in the northwest.

"Musharraf has chosen a dangerous path," said Mufti Muhammad Naeem of Karachi’s largest Islamic school in the aftermath of the Islamabad mosque bloodshed."I think this situation could blow up in an all-out civil war."

Hangu, where today's other attack occurred, is close to Pakistan's lawless tribal regions on the Afghan border, where a large number of al-Qaeda fighters and their allies fled after US-led forces toppled the Taleban regime in Afghanistan in 2001.

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