Massive car bomb in Lahore....

A new front in the Taliban war in Pakistan...

About 300 people were wounded in the attack that caused huge damage to the city centre.

The attack deepened fears that militants will launch a wave of attacks in revenge for military operations in Swat against the Taliban in north-west Pakistan.

Pakistan's military has been locked in a one-month offensive against Taliban militants, which the authorities say has killed around 1,190 extremists and sent 2.4 million people fleeing their homes.

The attack also hit as General David Petraeus, head of the US Central Command, was in Islamabad for meetings with government and military leaders.

"I believe that anti-Pakistan elements, who want to destabilise our country and see defeat in Swat, have now turned to our cities," said the head of the interior ministry, Rehman Malik.

Just before the blast, two to four men got out of a car and opened fire at police guards at the gate. A driver then tried to ram a barrier outside the police emergency response unit.

The bomb caused widespread destruction, bringing down a government ambulance service building and damaging a nearby office of the military's main intelligence agency, the Inter-Service Intelligence agency (ISI).

"As some people came out from that vehicle and starting firing at the ISI office, the guards from inside that building returned fire," said an eyewitness. As the firing continued, the car suddenly exploded, he said.