The bomb exploded in the southern Russian city of Vladikavkaz, killing at least 60 and injuring about 100.

The BBC's Andrew Harding: "Officials described a scene of carnage"

The blast tore through the busy central market area shortly before midday on Friday, leaving shoppers and stallholders among the dead.

Reports say the bomb had been hidden behind a kiosk. President Yeltsin's envoy in North Ossetia, Vladimir Kalamanov, said what he called a subversive group had admitted responsibility for the bombing, but he gave no details.

Vladikavkaz is the capital of the North Ossetia region and is 50 km (31 miles) from the breakaway republic of Chechnya.

President Yeltsin condemned the bombing as an "act of terrorism".

In an address on national television, he said there would be a merciless fight against the perpetrators.

Mr Yeltsin has sent Interior Minister Sergei Stepashin to the scene to investigate the incident.

Chechnya link suspected

North Ossetia has until now been a relatively stable corner of Russia's turbulent Caucasus region.

Andrew Harding reports from Moscow

But it supported Russia in its two-year war against separatists in nearby Chechnya. It has also been involved in a long territorial struggle against the neighbouring republic of Ingushetia.

BBC Moscow Correspondent Andrew Harding says it is possible that the Vladikavkaz blast is a revenge attack linked to Chechnya, or a more general attempt by extremist forces to spread more chaos throughout the region.