The attack was close to the Pearl Continental Hotel and near Pakistan's army headquarters [AFP]

The blast, the second major bombing in less than a week to hit the country, occurred on Monday.

The attack off Mall Road was close to the Pearl Continental Hotel and near Pakistan's army headquarters, where 10 fighters mounted a nearly 24-hour siege last month that left 23 people dead.

Death toll rising

A senior police official said the attack was the work of a suicide bomber.

"The suicide bomber came on a motorcycle and blew up close to people gathered to get salaries. We found parts of a suicide vest and some body parts of the suicide attacker," Aslam Tarin, a senior police official, said.

A surge in violence has hit Pakistan in recent weeks, leaving more than 300 people dead last month alone as the military launches a major offensive against the Tehreek-e-Taliban (TTP).
 
UN pullout

Pakistani ground troops have been locked in street battles for two days with Taliban fighters in Kanigurram, one of the largest towns in South Waziristan and described as a major operation centre for the TTP.

The worsening security situation coincides with a United Nations decision to pull out international staff from Pakistan's northwest.

"They [the employees] will be relocated immediately," Ishrat Rizvi, a UN spokeswoman, told the AFP news agency. He was unable to say immediately how many staff the decision affected.

Ban Ki-moon, the UN secretary-general, said that the UN had raised the security level to "phase four" in NWFP and the Federally Administered Tribal Areas, a UN statement said.

"The decision has been taken bearing in mind the intense security situation in the region," the statement said.

Last month, the UN's World Food Programme closed distribution centres serving more than two million people in the northwestern region because of security fears.

Taliban bounty

Against this backdrop of violence and tensions, the Pakistani authorities have offered a reward worth $5m for information leading to the capture, dead or alive, of Hakimullah Mehsud, the leader of the TTP, and 18 other fighters.

The rewards for the group's senior fighters were offered in a government advertisement on the front page of The News daily and on Pakistani television channels overnight.

"The activities of these brutal people, who have no fear of God, are bringing a bad name - not only to the Mehsud tribe but all tribesmen ... and also give a bad name to Pakistan in the whole world," the advertisement said.

"These people certainly need just punishment. They are the killers of humanity. Help the government of Pakistan to annihilate them."

Mehsud, who took on the leadership mantle after a US drone attack killed his predecessor, Baitullah Mehsud, in August, headed the list with 50 million Pakistan rupees ($600,240) on his head.

The TTP has been blamed for some of the worst attacks in Pakistan, which have killed about 2,400 people in a wave of violence over the past two years.

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