Rescue official Nayyar Ali Babar said he saw at least 20 bodies and 'a couple dozen' wounded people.
A suicide bomber on a motorbike ripped through a queue of people collecting salaries near a four-star hotel in Rawalpindi, killing at least 20 people, a police official said.
The explosion outside a building housing a bank and the four-star Shalimar Hotel showered the area with human flesh, smearing blood on the ground and shattering windows, said witnesses.
'We were sitting on the second floor of our office. It was a huge blast,' said Raja Sher Ali, a marketing manager in a local company.
'Our building shook as if in an earthquake and when we came out there was smoke everywhere and body parts were thrown into our office.'
Deeba Shehnaz, a rescue workers spokeswoman, said at the site that 'the death toll has risen to 24' - with another 24 people wounded.
Pakistani officials said today they expected the death toll to rise.
A surge in bloodshed by suspected militants has left more than 300 people dead in recent weeks as Pakistan presses a major offensive against the Tehreek-e-Taliban Pakistan (TTP) in the tribal belt, where US officials say Al-Qaeda are plotting attacks on the West.
The carnage comes as the Pakistan government announced rewards of up to $5 million (3 million pound) for information leading to the capture, dead or alive, of Pakistani Taliban leader Hakimullah Mehsud and his top aides.
'We have information that 15 to 20 people have been killed,' Rana Sanaullah, Punjab Law Minister who is also responsible for security of the province said about the bombing in Rawalpindi.
'Around 20 people were killed in the blast,' added Rao Mohammad Iqbal, the city police chief.
With the army involved in the offensive against Hakimullah and his followers in their South Waziristan strongholds, the militants have retaliated by stepping up a bombing campaign against urban targets across the country.
Photo: Police officials said a motorbike suicide bomber detonated his bomb after targeting people collecting salaries near a four-star hotelThe attack in Rawalpindi, a large sprawling city that twins the smaller, administrative capital, Islamabad, took place in an area that is home to the army headquarters as well as some hotels.
'It was a huge blast. Smoke is rising from the scene,' said witness Nasir Naqvi, who runs a travel agency near the site of blast.
TV stations showed ambulances and police vehicles racing through the streets and officials said they expected the casualty figures to rise.
The announcement of the bounty on Hakimullah's head was made through newspaper advertisements as security forces honed in on his Tehrik-e-Taliban Pakistan (Taliban Movement of Pakistan) strongholds in South Waziristan.
'These people are definitely killers of humanity and deserve exemplary punishment,' read the front-page advertisement, with photographs of Hakimullah and seven senior lieutenants in The News.
'Help the government of Pakistan so that these people meet their nemesis.'
A reward of over $600,000 (£400,000) was announced for Hakimullah, his top aide Wali-ur-Rehman, and his cousin, Qari Hussain Mehsud, who is known as the mentor of suicide bombers.
The trio spoke last month to a group of journalists in Sararogha, a major Taliban base in South Waziristan, but have not been sighted since.
Security forces have captured Kotkai, the birthplace of Hakimullah and hometown of Hussain, in the Waziristan offensive.
Yesterday the military said it was on the outskirts of Sararogha and Makeen, also strongholds of Hakimullah.
In the deadliest militant attack in more than two years, over 100 people were killed and scores more wounded on Wednesday when a car bomb detonated in a crowded market in the northwest frontier city of Peshawar.
TTP has been blamed for some of the worst attacks in Pakistan, which have killed around 2,400 people in a deadly wave of carnage over the past two years.
Ground troops have been locked in street battles for two days with Taliban in Kanigurram, one of the largest towns in South Waziristan and described as a major operation centre for the militant umbrella group.
Although none of the details provided by the military can be verified because communication lines are down and journalists are barred from independent access to the area, commanders say 306 insurgents have been killed.-Sri Lanka Guardian
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