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Prime Minister Manmohan Singh said the perpetrators of the "dastardly act" would be punished.
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Twin bomb attacks killed at least 20 people and wounded more than 80 others on Thursday in a crowded suburb of the Indian city of Hyderabad in what officials said was an act of terrorism.
Prime Minister Manmohan Singh said the perpetrators of the "dastardly act" would be punished. It came with the nation on alert after the recent hanging of a separatist unleashed protests in the Muslim-majority region of Kashmir.
The evening bombings targeted a mainly Hindu district in Hyderabad, a hub of India's computing industry in the southern state of Andhra Pradesh which hosts local offices of Google and Microsoft among other Western IT companies.
The Australian cricket team, which is due to play a Test match against India in Hyderabad from March 2, said it was now in talks with Indian authorities and stressed that the safety of its players was "paramount".
Doctors struggled to treat a stream of wounded victims as bloodied patients lay on stretchers at city hospitals and anguished relatives clamoured for news of their loved ones, an AFP photographer saw.
Police said two bombs went off in quick succession, and bomb-disposal experts were trying to defuse three more unexploded devices. The charred wreckage of parked scooters lay on the ground.
"This is a terror attack for sure," Hyderabad deputy inspector of police Shiv Kumar told AFP, while adding there had been no claim of responsibility.
Twenty people died in the attack, said Kumar, while an officer in the police control room said 82 people had been wounded in the blasts in the Hyderabad suburb of Dilsukh Nagar.
"This is a dastardly act and the guilty will not go unpunished," Prime Minister Singh said of the attacks, the most serious to hit India since 13 people died in a 2011 bombing outside the High Court in the capital New Delhi.
But Singh, speaking in New Delhi, also appealed for "calm" in the aftermath of the Hyderabad blasts, as police struggled to keep order with large crowds massing at the scene.
N. Kiran Reddy, the chief minister of Andhra Pradesh, told reporters in Hyderabad that the blasts were intended to incite communal violence in the city, which has a large Muslim population.
"This attack is only to disturb all communities living in the city. I request people to maintain calm and they should not visit the blast site."
Foreign Secretary Ranjan Mathai, the top civil servant in India's external affairs ministry, did not rule out foreign involvement.
"I am not sure there is any evidence it could be homegrown terrorism. We have had a number of attacks which have been traced to inspiration or leadership outside the country," he said at a Washington think-tank.
But Mathai avoided direct criticism of nuclear-armed rival Pakistan, which New Delhi blamed for the 2008 Mumbai attacks in which 166 people were killed when Pakistani-born gunmen laid siege to the city.
Home Minister Sushil Kumar Shinde said the two devices that exploded were planted close to each other.
"The two bombs were placed on two different bicycles and the distance between them was about 100 to 150 metres (yards)," Shinde told reporters in New Delhi.
While Hindus form the majority of the population in Hyderabad, one of India's largest and most historic cities, there is a sizeable community of Muslims living in the old quarter.
In May 2007, at least 11 people were killed in a blast at a mosque in Hyderabad and five more died when police fired at Muslim protesters.
Months later in August, at least 40 people were killed in Hyderabad when two blasts hit an auditorium and an outdoor restaurant.
It remains unclear who carried out the 2007 attacks.
The latest explosions came on the same day as India's parliament opened for its key budget session, amid tensions following the hanging earlier this month of the Kashmiri separatist, Mohammed Afzal Guru.
The execution of Guru, who had been convicted of helping to plot a 2001 attack on the Indian parliament that left 10 people dead, has driven up tensions in the Himalayan region of Kashmir, which India disputes with Pakistan.