The BBC's Paul Anderson: No-one has said admitted carrying out the attack

The Mayor of Moscow, Yuri Luzhkov, said the explosion - which happened at about 2000 local time - was an "act of terrorism".

He was speaking at the scene of the blast, just 50m from the north-west wall of the Kremlin.

The explosion happened in an amusement arcade on the bottom floor of the underground Manezh shopping and restaurant complex.

Diners and late-night shoppers lacerated by flying glass and metal shards were carried out on stretchers or led from the underground centre by emergency crews. Some of the injured were young people and children.

One eyewitness, Alexander Okropildze, told the Reuters news agency: "There was a big bang and smoke. We saw windows fly out."

Russia's ministry of emergency situations refuted earlier reports that four people had died in the explosion, saying no-one had lost their lives.

BBC Moscow correspondent Robert Parsons: "Blast a stone's throw from the Kremlin"

The Federal Security Service said the explosion had been caused by a bomb of about 300g of explosives and that it had blown a hole in the ground.

Teams of specialists were still at the scene near Red Square early on Wednesday, looking for clues.

Russian Prime Minister Vladimir Putin has ordered an investigation "as quickly as possible", Tass reported.

President Yeltsin was "outraged" by the apparent bomb attack, and expressed sympathy for the casualties.

Tight security

Security was tightened soon after the blast and police reinforcements and interior ministry troops took up position around Red Square and the Kremlin.

Fire officials evacuated the shopping centre as shoppers and diners fled the scene following the incident.

Security service agents said the bomb blew a hole in the ground

No-one has said they carried out the explosion, and Mr Luzhkov said no warning had been given.

The mayor said people would speculate that it was the work of radical Islamic separatists from Chechnya fighting for independence.

However, the BBC's Paul Anderson in Moscow says the proximity of the blast to the offices of President Yeltsin has given rise to suggestions that it may have been connected to the political battles currently being waged ahead of parliamentary elections later this year.

Russian media also say the victims could have been caught up in the violent settling of scores between business rivals.

'Beasts'

Mr Luzhkov, who oversaw the construction of the shopping centre as one of the main focal points of his campaign to modernise the city, said the people who planted the alleged bomb were "beasts".

The three-floored shopping centre - one of Europe's largest malls - was opened in 1997 as part of Moscow's 850th anniversary celebrations.

This was the second major explosion to rock the Russian capital this year.