At least nine people are reported to have been killed and 15 injured in a bomb attack in Pakistani-administered Kashmir.

The bomb went off near a crowd watching a street performer in the town of Islamgarh, near Mirpur 140km south of state capital Muzaffarabad.

Police said it had been left in a shopping bag.

Five people died on the spot, and four others died later in hospital.

A local teacher, Ozair Mughal, said he saw people lying in a pool of blood with the body of a child torn apart.

"I was terrified to see the badly mutilated bodies. The explosion left a large crater."

Police quickly cordoned off the area.

India blamed

Police and local officials blamed India for the blast.

"This is a subversive act and India is behind it," Mirpur divisional commissioner Sardar Khurshid told reporters.

"It is a cowardly act of the enemy in a bid to frighten the people here and weaken their will to support the freedom struggle in Indian-occupied Kashmir," the administrator of Pakistan-administered Kashmir, Sultan Mahmood Chaudhry said.

The BBC's Zafar Abbas in Islamabad says it is the first incident of its kind in the town, and has set off a wave of panic.

Earlier in the week, several people were injured in a bomb blast in another part of Pakistani-administered Kashmir.

A senior official in the region has described the incidents as acts of subversion, but has not directly blamed any group.

Kashmir is disputed between India and Pakistan, who have fought two wars over the territory since independence in 1947.