"At 0635 GMT an unidentified explosive device went off at Loo beach," a Sochi police spokeswoman said.

"The blast went off around three metres from the water. Russia's internal security agency, the FSB and local prosecutors are trying to determine the cause of the blast.

"The beach is more popular around noon, so there would have been more people injured if it had occurred later."

Sochi is one of the most fashionable Russian resorts especially favoured by the elite and Russian presidents use Sochi as their vacation site.

Russian news agencies quoted the Kremlin spokeswoman as saying Dmitry Medvedev, the president, phoned his envoy in south Russia, Vladimir Ustinov, and told him to take personal charge of the investigation.

The government has allocated over $10bn to reconstruct the ageing resort before the 2014 Olympic Games, attracting both business and criminal groups.

So far police have not said who might be behind the blast.

Sochi is also situated just miles from the border with Georgia's breakaway region of Abkhazia, where looming tensions between Moscow-backed separatists and Tbilisi have fuelled fears of a possible new war.

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