The blast struck the popular German Bakery in Pune, 125 miles southeast of Mumbai, about 7.30pm (1400GMT), when the café was packed with diners.Vinod Dhale, an employee at the bakery which is located in Pune's upmarket Koregaon Park area, said: "We heard a big noise and we all rushed out. The impact was so much that there were tiny body parts everywhere."
At least one foreigner was thought to be among the dead. About 50 injured, including several Iranians and a Taiwanese, were taken to city hospitals. The bomb is thought to have been planted in a bag left under a table.
There was no immediate claim of responsibility for the blast, which India’s Home Minister Palaniappan Chidambaram described earlier as "a significant terrorist incident".
"What was being targeted was a soft target where both foreigners and Indians, especially young people, congregate," he said, after visiting the bomb site and the victims in a nearby hospital earlier today. “All the information available to us at the moment points to a plot to explode a device in a place that is frequented by foreigners as well as Indians.”
The German Bakery is close to the Osho ashram, a controversial free-love commune popular with foreigners, which security agencies had warned was on a target list of Islamist militants. It was also near Pune's Chabad House, a Jewish prayer centre, similar to the one targeted in Mumbai along with two luxury hotels and the city's main train station in November 2008.
The Osho ashram was one of the potential targets allegedly surveyed by David Coleman Headley, an American accused by American authorities of scouting targets for the Pakistan-based Lashkar-e-Taiba (LeT) terrorist function, the group behind the Mumbai attacks, in which 166 people, including 25 foreigners, were murdered by a group of 10 gunmen. 300 others were injured.
According to Indian officials, Mr Headley, who was at one time an informer to the US visited the ashram in March 2009.
Mr Headley came to the attention of the US security services in 1997 when he was arrested for heroin smuggling in New York. He earned a reduced sentence by working for the US Drug Enforcement Agency (DEA) by infiltrating Pakistan-linked narcotics gangs.
Indian investigators, who have been denied access to Mr Headley, suspect he remained on the payroll of the US security services, but switched his allegiance to LeT.
"India is looking into whether Headley worked as a double agent," an Indian home ministry official said in December.
No one has claimed responsibility for the Pune attack, police said.
"There was an abandoned bag which seems to have contained some IED [improvised explosive device]," a police official told reporters.
The explosion came a day after India and Pakistan agreed to resume high-level peace talks on February 25, which have been suspended since the Mumbai atrocity.
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