At least seven people were killed and more than 70 hurt when blasts tore through crowds celebrating independence day, Mexican authorities have said.
The explosions happened shortly before midnight, as people gathered in the centre of the western city of Morelia.
Local media reports suggest they may have been caused by grenades.
The city is the capital of Michoacan, a state hit by a wave of drug gang violence in recent years. It is not known who was behind Monday's blasts.
The governor of Michocoan, Leonel Godoy, said "organised crime" - a term often used by Mexican officials to denote drug cartels - was behind the latest attack.
Drug-related violence in Mexico has claimed the lives of more than 2,700 people so far this year.
"Without doubt we are faced with a terrorist attack," the governor added.
Shoot-out
The explosions went off in the main square of Morelia as the crowds celebrated the beginning of the traditional re-enactment of Mexico's cry for independence, known as El Grito, or The Shout.
"The dead and wounded... were the poorest people, who have no other form of entertainment," Reuters news agency quoted Mr Godoy as saying.
Dozens of police officers were involved in a shoot-out after chasing suspects near the scene, the local El Sol de Morelia newspaper reported.
It said soldiers were deployed to control routes in and out of the city, which lies some 250km (155 miles) west of the capital, Mexico City.
President Felipe Calderon's office said in a statement that it condemned the violence "in the strongest terms" and would redouble its efforts to support the state and its investigation.
Mr Calderon, whose home state is Michoacan, had taken part in independence day celebrations with tens of thousands of people in Mexico City's central Zocalo square.
^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©
~RS~q~RS~~RS~z~RS~01~RS~)