A time bomb exploded in the southern Pakistani port city of Karachi yesterday, killing two people and wounding three, police said.

The 3-kg bomb blew up outside a car rental shop in an affluent southern neighbourhood, a Karachi police spokesman said.

The explosion, which occurred at around 6.30 a.m. gouged a 0.6-metre deep crater in the pavement and damaged three cars, witnesses said. Police cordoned off the site.

All the victims worked at the car rental shop which counts government officials among its customers, shop owner Mohammed Akram said. All three wounded were in serious condition, doctors said.

A spate of terror attacks has rocked Karachi, a teeming city of more than 14 million people, since Pakistan joined the US-led war on terrorism in 2001. Police blame Islamic extremists and Al-Qaeda-linked militants for most of the attacks.