QUETTA, Pakistan (AP) - Ethnic Baluch nationalist group from southwestern Pakistan on Tuesday claimed responsibility for a bombing that killed at least two people in the southern city of Karachi.

Chakar Azam, spokesman for the Baluchistan National Army, said they detonated the car bomb outside a building where the offices of Pakistan Petroleum Limited are located - also near a KFC restaurant.

Police said the powerful bomb exploded outside the restaurant, setting off a massive fireball that overturned cars and shattered steel and glass.

The ethnic army has launched numerous small bombings, mostly in southwestern Baluchistan province, in recent years. They are demanding the central government give more revenue to local people for natural gas extracted from their territory.

Interior Minister Abtab Khan Sherpao told Geo private television network that he had also heard that the Baluch nationalist group made telephone calls to newspapers and has claimed responsibility for the attack.

The powerful blast struck at about 8:45 a.m., as commuters were heading to shops and offices in the crowded downtown area of Karachi, Pakistan's business hub.

Police originally said three people died, but later lowered the total to two, saying one man who was believed dead was in fact in critical condition and undergoing emergency surgery at the city's Civil Hospital.

Police explosives expert Mohammed Iqbal said the bomb was made from five kilograms of homemade explosives and detonated by a timer. The car containing the bomb was blown to pieces, leaving a crater two metres across.

Manzoor Mughal, a senior police investigator, said earlier the blast also damaged the offices of three Pakistani banks. One foreigner of unknown nationality was among the injured, but was released from a hospital after being treated, he said.

Karachi has been the target of a number of bombings in recent months that have killed more than a dozen people. Police said earlier they tightened security in the city and were searching for clues about those behind the attack.

Hundreds of people gathered at the bomb site in the area of government offices and luxury hotels. The blast was powerful enough to damage windowpanes at the Pearl Continental Hotel, which is popular with foreign tourists and businesspeople.

Karachi, Pakistan's largest city, is a centre of Islamic militancy and previous bombings in the city have been linked to extremists opposed to Pakistani President Gen. Pervez Musharraf's close ties to the United States.

The attack came three days before Pakistan is to host a conference of international donors to raise funds for victims of the devastating Oct. 8 earthquake that killed about 86,000 people in the country's northwest and in Pakistani-controlled Kashmir. Hundreds of U.S. and other foreign troops are in the country helping with quake relief.

The blast also occurred about 100 metres from the Sheraton hotel, where the England cricket team is due to stay when they play Pakistan in a one-day match on Dec. 15.

The KFC restaurant occupies the ground floor of a government office building housing the Pakistan Industrial Development Corp. Firefighters prevented the blaze from spreading to other parts of the building.

In September, bombs struck KFC and McDonald's restaurants in Karachi, injuring three people in attacks believed linked to a nationwide strike called by a hardline Islamic coalition opposed to Musharraf.

A KFC restaurant in Karachi also was burned in May, killing six workers inside during an outbreak of religious violence between Sunni and Shiite Muslim groups in the city.

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