Musharraf is attempting to clamp down on violence in the city

Police said that it appears a suicide bomber rammed the bus - which belonged to the Pakistani navy - outside the hotel.

Two Pakistanis are also thought to have been killed, provincial police chief Syed Kamal Shah told Reuters news agency.

Another 20 people were injured when the powerful bomb shattered the bus at around 0800 local time (0200 GMT) creating a large crater, witnesses said.

It was not clear who was behind the attack, which police said did not appear to be linked to other recent blasts in the city.

Loud explosion

The explosion occurred in a wealthy neighbourhood in Karachi where many international hotels are situated.

Witnesses at the scene of the explosion described the scene as horrific, as ambulances struggled to reach the injured.

I was just standing on the street and the noise was so loud it was frightening

Police officer Munir Sheikh

The New Zealand cricket team, currently staying in a hotel only yards from where the incident occurred, have since cancelled the remainder of their tour.

The noise from the explosion "was so loud I think you could have heard it from 10 kilometres (six miles) away," police officer Munir Sheikh told the Associated Press news agency.

"I was just standing on the street and the noise was so loud it was frightening."

Latest threat

Foreigners travelling in Pakistan have been told to be cautious following threats to Westerners from militant Islamic groups angered by Pakistani President General Pervez Musharraf's support for the US-led war on terror in neighbouring Afghanistan.

In January American journalist Daniel Pearl was abducted in Karachi while researching a story. A tape showing his death was later handed to American consular officials.

And in the past few days Karachi has been rocked by a series of bomb explosions following the sectarian killing of two members of the ethnic Muttahida Qaumi Movement - which represents Urdu-speakers who migrated from India during the partition of the subcontinent in 1947.

One boy was killed last Thursday when a bomb exploded in a shop in an eastern suburb. Reports said six family members were wounded.

A second bomb exploded in a market in a southern Karachi neighbourhood, damaging some cars parked nearby.

The incidents followed two other explosions late last Wednesday in different market areas of the city, which wounded at least 18 people, police said.