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Blast in Pakistan's Peshawar Kills 49

PESHAWAR (Reuters) -- A suspected suicide car-bomber killed 49 people on October 9 in the Pakistani city of Peshawar in an attack that the government said underscored the need for an all-out offensive against the Pakistani Taliban.

There was no claim of responsibility but Interior Minister Rehman Malik said "all roads are leading to South Waziristan," referring to the headquarters of the Pakistani Taliban in the northwest.

"One thing is clear, these hired assassins called Taliban are to be dealt with more severely," Malik told reporters in Islamabad.

"We think we have no other option except to carry out an operation in South Waziristan," he added, while declining to say when that might happen.

The suspected car-bomber set off his explosives as he was passing a bus, police said.

The blast hurled the bus onto its side on a road in a commercial neighbourhood of the northwestern city. Several cars were also destroyed.

"The bus was making a turn when the blast occurred and it threw the bus into the air," a witness told the Duniya television channel.

An official at Peshawar's main hospital said 49 people had been killed including seven children.

The bomb dented trade at Pakistan's main stock market, which has gained about 66 percent this year after losing 58.3 percent in 2008.

"There was some negative impact as the market has come off its intra-day high but there seems to be foreign support at lower levels," said Mohammed Sohail, chief executive at Topline Securities Ltd.

Violence Picking Up

Islamist militants who have set off numerous bombs in towns and cities including Peshawar over the past couple of years, most aimed at the security forces and government and foreign targets.

Early this year, the militants pushed to within 100 kilometers of Islamabad, raising fears for nuclear-armed Pakistan's stability.

The United States needs Pakistani help against militants crossing into Afghanistan to battle U.S.-led forces there.

An exasperated U.S. Secretary of State Hilary Clinton said early this year the government appeared to be "abdicating" to the militants.

But that changed in late April when the security forces launched a sustained offensive in the Swat Valley, 120 kilometers northwest of Islamabad, largely clearing Taliban from the region.

The militants suffered another big blow on August 5, when their overall leader, Baitullah Mehsud, was killed in an attack by a missile-firing U.S. drone aircraft in South Waziristan.

Mehsud's death and reports of infighting over who would take over as leader raised hopes that the militants were in disarray.

But in recent weeks violence has been picking up after a relative lull following Mehsud's killing.

The government ordered the army to go on the offensive in South Waziristan in June and security forces have been launching air and artillery strikes, while moving-in troops, blockading the region and trying to split off factions.

The army has declined to say when it would send in ground troops.