ISLAMABAD -- Two suicide bombers blew themselves up outside Pakistan's main defense industry complex as workers were leaving at the end of their shift, killing at least 59 people, police said.
Pakistani Taliban claimed responsibility.
Pakistan is on the front line of the U.S.-led campaign against terrorism and Al-Qaeda-linked militants have launched a wave of attacks on the security forces over the past year, bombing military camps, patrols, and transport.
The violence combined with political uncertainty has helped undermine investor confidence and send the country's financial markets on a downward spiral.
"There were bodies lying everywhere and wounded people soaked in blood were screaming for help," said Shah, the manager of a petrol station near the industrial complex in Wah, 30 kilometers northwest of Islamabad. "Many of the wounded were either without legs or hands. I could see body parts hanging on trees."
A Pakistani Taliban spokesman said the blasts were retaliation for military operations against militants in the northwestern region of Bajaur, on the Afghan border.
"If it doesn't stop we will continue such attacks," Taliban spokesman Maulvi Omar said by telephone.
Police said nearly 50 people were killed and about 70 wounded in the blasts near the heavily guarded complex, the hub of Pakistan's defense industry where about 25,000 workers produce explosives, ordnance, and weapons in about 15 factories.
Hundreds of workers were milling about outside the complex at the end of their shift when the bombers struck.
One of the bombers blew himself up outside the complex's main gate while the second detonated his explosives at almost the same time near another gate, said police officer Sardar Shahbaz.
Soldiers cordoned off the area and kept reporters back as ambulances arrived to take away casualties, a witness said.
Pakistani Taliban said last week they were behind a bomb attack on an air force bus in the city of Peshawar which killed 13 people. The blast was in retaliation for military operations in the northwest, a militant spokesman said.
Since July last year, Pakistan has suffered a wave of militant violence, particularly in the northwest, in which hundreds of people have been killed including many security force members.
Violence subsided when a coalition government that came to power after a February election opened talks with militants but it picked up again after their top leader, Baitullah Mehsud, suspended the talks in June.
This week's resignation of President Pervez Musharraf, under threat of impeachment from the ruling coalition, has raised questions about the government's commitment to tackle violence.
Although Musharraf's support for the U.S.-led war on terrorism was deeply unpopular, the government has vowed to keep up efforts to fight the militants.
But the first days since Musharraf's departure have seen squabbling among the ruling parties, raising concern about the government's ability to deal with security and economic problems and bring political stability.
Share and currency markets have dropped in the last two days after initial gains on Musharraf's exit. Pakistan's stock market, which rose for six years to 2007, and was the best performing in Asia in that period, has fallen about 27 percent this year.