By M Ilyas Khan
BBC News, Islamabad
The blast occurred in a congested area of the city
Investigators in the Pakistani city of Karachi said a bomb blast on a Shia procession on 28 December was caused by an improvised explosive device (IED).
The conclusion of the police has caused a stir because previously the blast was thought to have been caused by a suicide bomber.
More than 40 people were killed in the explosion which significantly raised sectarian tension in Karachi.
After the explosion, marchers turned their anger on ambulance workers.
They were attacked along with members of security forces and journalists.
The blast happened as Shia Muslims marked the holy month of Muharram, commemorating the death of the Prophet Muhammad's grandson.
Two days after the attack, Taliban said they carried out the suicide bombing and identified the bomber as Hasnain Muawia.
Interior Minister Rehman Malik told the media on Tuesday that the explosives were planted in one of the boxes used to store newspaper cuttings of the Koran and other holy books to prevent their desecration.
The boxes were placed along the route of the march.
According to reports, the boxes were not security-checked ahead of the scheduled procession.
This conclusion is based on evidence provided by forensic experts and CCTV footage obtained from a network of surveillance cameras installed by the Karachi district government in sensitive areas of the city.
The footage showed that rioters were quick to set hundreds of shops on fire some 2km (1.24 miles) from the venue of the blast minutes later.
They wore gloves and used inflammable material for arson attacks.
"We have a definite breakthrough," Karachi police chief Waseem Ahmed told the media on Tuesday.
"We know who is behind these attacks, and we will present them before the media within a week," he said.
The police have arrested four suspects and issued pictures of about 50 others, mostly obtained from the CCTV footage.
The police have also asked the city government to provide footage of at least seven days prior to the day of the attack to determine how the bomb was planted and by whom.
Observers have been speculating on who might be involved.
One suspect is Karachi's notorious "land mafia" which many believe might have wanted to destroy valuable property in the hope that it would lead to new lease agreements.
Others have been casting doubts on the Muttahida Quami Movement (MQM) - the largest and most organised political party of the city which is a partner in power both at the provincial and central levels but whose relations with the ruling Pakistan People's Party (PPP) have soured over the past couple of months.
However, Mr Rehman Malik categorically denied that MQM was involved.
The third suspect is one of the Sunni extremist organisations such as Lashkar-e-Jhangvi, with affiliation to the Afghan and Pakistani Taliban.
Police sources told the BBC that these were the prime suspects.