Although no group has admitted responsibility for the bomb, the Pakistani authorities told the BBC they had "unimpeachable" evidence it was the work of the Research and Analysis Wing (RAW) of the Indian intelligence service.

The BBC's Andrew Whitehead in Dehi: 'straightforward and brief denial' (1'50")

However, an Indian foreign ministry spokesman said the allegations were "preposterous, fictitious and baseless".

'Terrorist act'

The Pakistani Information Minister, Mushahid Hussain, has accused India of trying to provoke political violence in Pakistan following the recent nuclear tests on both sides of the border and said his government would make the latest evidence available.

Mushahid Hussain: "India is trying to divert attention from internal dissension."

"It is a major act of terrorism. We have no doubt, based on a report that we have now, that this pattern is being fomented from across the border by India through its intelligence organisation, RAW.

"Perhaps the Indians, having failed to prohibit Pakistan earlier after their tests, they were caught by surprise by the Pakistani tests. Now they want to put pressure on Pakistan through these acts of terrorism."

Routine accusations

Our correspondent says both India and Pakistan have routinely accused each other of responsibility for organising bombings and sponsoring civil unrest in the other country. The allegations are always strongly rebutted.

A sign of how bad relations have become

The latest ill-tempered exchanges between Delhi and Islamabad are said to indicate how bad relations have become between South Asia's long feuding and now nuclear neighbours.

The tension has increased in recent weeks over the nuclear tests and the disputed province of Kashmir.

Invitation to talk

On Saturday, the Pakistani Prime Minister, Nawaz Sharif, invited his Indian counterpart, Atal Behari Vajpayee, to hold talks to resolve the nuclear test situation.

Owen Bennett-Jones: "The bombing does not necessarily affect broader strategic questions like nuclear talks."

Mr Sharif said Pakistan has long favoured a meaningful dialogue and that that was still the case despite the series of nuclear tests conducted last month by both sides.

Mr Vajpayee made a statement in his own parliament earlier last week expressing his readiness to discuss the issue.

But there has been no agreement on dates or on the level of any meeting.