Egyptian police have arrested three people after yesterday's bomb attack on a popular Cairo tourist site that killed a 17-year-old French girl and wounded 17 other French teenagers.

"Three people there were arrested on the site as suspects after the attack," a police official said. "Others are being questioned as witnesses."

The blast occurred at the Khan al-Khalili market close to the historic Hussein mosque in a medieval part of the Egyptian capital. A second bomb was discovered by police after the explosion and was detonated safely.

The teenagers were part of a group of 54 schoolchildren from Paris, aged from 13 to 17, who were paying a last-minute visit to the bazaar before heading home. The dead girl, from the Paris suburb of Levallois-Perret, died in hospital. Another young man of 17 is seriously injured.

Twenty-two people were injured in the blast including the French children, a German tourist, three Saudis and three Egyptians.

Police cordoned off the area, full of cafés and souvenir shops, and used sniffer dogs to locate a second device as worshippers were evacuated from the mosque. Some witnesses said that one of the bombs appeared to have been thrown from a passing motorbike, while others said that the devices were lobbed from a nearby rooftop.

"There was a very powerful explosion. Then screams and blood. We all started running," said Romy Janiw, 28, one of the seven adults accompanying the teenagers.

Some reached Hussein hospital, a few hundred metres away, by foot. Others jumped into taxis to get to another medical facility. "We were very united. We helped the wounded," Ms Janiw said.

"We are devastated. The families are terribly shocked," said Jean-Yves Cavallini, Deputy Mayor of Levallois-Perret.

A crisis team with psychologists had been made available for the childrens' parents, he said. "We had to notify the parents of the dead young woman. It was very hard."

Tourism is the life-blood of the Egyptian economy, and was hit hard last September when gunmen in the far south of the country kidnapped a group of ten foreigners, mostly Germans and Italians, on tour of a remote desert region. The tourists were eventually freed in a raid by Egyptian special forces backed by German and Italian commandos.

Extreme Islamist groups have in the past deliberately targeted the lucrative trade in tourists lured to Egypt by its ancient monuments and medieval mosques.

The parents of the as yet unnamed girl who died and those of the seriously injured teenage boy have been flown to Cairo.

The French Embassy and consulate moved quickly to provide assistance to the teenagers. The group of youngsters from Levallois-Perret flew back from Cairo to Paris this morning and were met at the airport by psychologists and officials from the Foreign Ministry.

The town council of suburban Levallois-Perret, which organised the trip, has set up a trauma counselling unit for families of the 42 schoolchildren, who had spent a week in Egypt for their half-term holiday. Sixteen were slightly wounded in the explosion, which is assumed to have been caused by a grenade.

President Sarkozy and François Fillon, the Prime Minister, deplored the incident. "The Government condemns with the greatest firmness this criminal act of blind and absurd violence," said Mr Fillon.

"More than ever, France stands beside the Egyptian Republic as it faces this test and fights against terrorism."

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