We have already determined the group of individuals that could have been involved in this

Federal Security Service chief, Nikolai Patrushev

The number of dead has risen to 41, including 17 children, and about 20 servicemen, mostly members of a military band.

The head of Russia's Federal Security Service, Nikolai Patrushev, despatched to the town of Kaspiysk by President Vladimir Putin, said on Friday that several people had been arrested.

"We have already determined the group of individuals that could have been involved in this," he told journalists.

However, a Dagestani opposition figure said the security services had merely rounded up the usual suspects - local Islamists critical of the Dagestani authorities.

Chechen condemnation

Germany and the European Union have added their condemnation of the attack to that made earlier by world leaders including US President George Bush.

All in all, 48 children suffered. Among them little babies, toddlers, early teenagers

Deputy health minister

The EU said it hoped the investigation would clarify what had occurred, and that the guilty would be brought to justice.

President Putin on Thursday described the organisers of the attack as "Nazi-like scum".

The rebel Chechen Kavkaz Centre news agency unusually agreed with Mr Putin's assessment, and registered its indignation at the killing of civilian bystanders.

However, it also admitted that some Chechens have in the past disobeyed a ban by rebel leader Aslan Maskhadov on terrorist acts.

"All in all, 48 children suffered. Among them little babies, toddlers, early teenagers," said Dagestan's first deputy Health Minister, Dzhamalutdin Gasayev.

BBC Moscow correspondent Nikolai Gorshkov says about 100 injured people are in a serious condition in local hospitals.

Search for bombs

The parade was being held to mark the anniversary of victory in World War II, and the blast occurred just before a similar ceremony was to begin in Moscow.

The mine was packed with screws and ball-bearings, and reinforced with extra explosives, in order to cause maximum damage.

Troops, police and security services were on Friday combing Kaspiysk and other military towns and sites for more bombs.

Mr Patrushev did not reveal the names of those arrested, but there has been some speculation in the Russian media about the identity of those responsible.

According to the Itar-Tass news agency, security officials suspect the attack may have been carried out by men under the command of Islamic militant Rapani Khalilov.

Mr Khalilov is reported to have organised a series of incursions from neighbouring Chechnya into Dagestan nearly three years ago.

Gang leader

A report in the Moskovsky Komsomolets newspaper, quoting un-named officials in the Interior Ministry, said the attack could have been a response to the recent detention of gang leader, Zaur Akavov, who is blamed for an attack in which seven interior troops died.

The presidential envoy for southern Russia, Viktor Kazantsev, has cautioned against blaming separatist rebels in Chechnya without evidence.

Kaspiysk, an army and naval base, suffered an even more devastating attack in 1996 when a bomb struck an apartment block housing border guards, killing 68 people.

No-one was ever convicted of that attack which occurred at the height of Moscow's war against separatists in Chechnya.

At the time, there was speculation that organised criminals in the lucrative caviar business may have planned the attack as a warning against cracking down on smugglers.

But Dagestan has been constantly under the shadow of the wars in Chechnya.