The explosion occurred in a busy market in the south of New Delhi [Reuters]

Police said that the Mehrauli market in the southern part of the capital was packed with shoppers when the suspected bombing occurred on Saturday, according to the Press Trust of India.

A police officer said that witnesses had said that the explosion took place after a package fell from a motorcycle riden by two youths.

The device reportedly blew up after being picked up by a young boy.

"Two young men in black denims, black T-shirts and wearing helmets drove a motorcycle to the market and the pillion rider dropped a polythene bag containing the bomb," H.S. Dhaliwal, deputy police commissioner, told reporters.

"A 10-year-old boy tried to help and return the bag to the riders but they sped away at high speed and the bag exploded, killing the child instantly."

'Low-intensity blast'

Rajan Bhagat, a police spokesman, said police were investigating the nature of the explosive and described it as "a low-intensity blast".

Television footage showed blood and broken glass littering the streets.

The Press Trust of India news agency said that several of the injured had been admitted to hospital in critical condition.

The blast came just two weeks after an apparently co-ordinated series of bombings in the city killed at least 21 people and wounded more than 100 others.

The attack was claimed by a group calling itself the Indian Mujahidin, which also said it was behind blasts in Jaipur, Ahmedabad and Bangalore.

There was no immediate claim of responsibility for Saturday's blast.

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