A suspected suicide bomber killed 11 people outside a Russian market yesterday, prosecutors said, in one of the worst attacks in months to hit Russia's turbulent North Caucasus region.

The explosion detonated as a minibus taxi pulled up outside the main market in the southern Russian city of Vladikavkaz, killing passengers and ripping the doors off one side of the vehicle. Prosecutors said they suspected a terrorist attack.

North Ossetian leader Taimuraz Mamsurov, quoted by Interfax news agency, said: "According to preliminary information, the explosive device was detonated by a female suicide bomber."

News agencies quoted Mr Mamsurov as saying security officers had found the head of a woman believed to be the suicide bomber.

The attack was fresh evidence that despite largely quelling a separatist rebellion in nearby Chechnya, Russia is struggling to contain violence in its southern regions that has fuelled instability and killed thousands of people.

"Today in the centre of Vladikavkaz an explosion occurred as a result of which 11 people were killed," the investigative unit of the Prosecutor General's Office said in a statement. "A criminal case has been opened... (for) murder and terrorism."

Mr Mamsurov, after an emergency meeting with North Ossetian security officials, said nine people were killed and about 40 injured. He declared November 8 a day of mourning in North Ossetia.

Russian President Dmitry Medvedev ordered police and state security agencies to tighten security and to keep him informed about the investigation, the Kremlin press service said.

The United States condemned the explosion in Vladikavkaz as "a heinous act of terrorism" and expressed its condolences to the families of the victims and the government of Russia.

"There can be no justification for such terrorism," State Department spokesman Robert Wood said in a statement.

Vladikavkaz is in Russia's North Ossetia region, scene of the Beslan siege in 2004 in which more than 300 people were killed after their school was taken hostage by gunmen linked to a separatist rebellion in Chechnya.

Footage recorded at the scene of the blast by a Reuters cameraman showed the mangled white minibus, with several disfigured corpses lying on the ground around it.

The body of one woman was covered with a pink sheet and her handbag laid on top. Fruit lay scattered around the minibus and windows were shattered in a building 30 metres away.

"We were standing at the stop waiting for our minibus when an explosion banged nearby," Jerassa Gagloyeva, a 19-year-old student whose face was lightly singed by the shockwave, said at a local clinic.

"We were so scared we just ran away. When the initial shock passed we turned for medical assistance." Jerassa was accompanied by a friend with light burns on her face and hands.

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