A Mercedes sedan exploded outside the National Hotel across from Moscow's Red Square yesterday, killing at least five people and sparking fears of a new wave of terrorism in the heart of the Russian capital.
However, it was not clear whether the blast was due to a terrorist act or a business dispute that had turned violent, police said.
The ITAR-Tass news agency reported that the explosion had been caused by a female suicide bomber, and that an undetonated explosive had been found on the bomber's body.
The Interfax news agency said that a law enforcement official on the site said there may have been two suicide bombers, and that moments before the blast they asked passers-by where the lower house of parliament, the State Duma, was located.
However, Yevgeny Gildeyev, a police spokesman, said that many businesses had offices on the hotel's lower floors and that the explosion might have been motivated by a commercial dispute.
Contract murders occur frequently in Russia's large cities.
"From what we see, we cannot exclude any version," said Kirill Mazurin, another police spokesman on the site of the blast.
The Federal Security Service said it considered the bombing a terrorist act, the Russian news agencies reported.
Interfax said law enforcement sources thought that the explosion was caused by a car bomb.
However, it later reported that a headless female body was lying near the site of the blast, near a black briefcase that authorities thought might contain more explosives.
Both ITAR-Tass and Interfax said that more undetonated explosives had been found near the hotel.
Five people were killed, three were injured, and seven were given first aid on the spot and released, said Natalia Alisiyenko of the Moscow police.
According to ITAR-Tass medical workers on the site said most of the victims appeared to be passersby.
Prosecutors opened a criminal case under articles of terrorism, but it was not clear whether they considered the blast politically or commercially motivated.
The blast occurred outside the National Hotel, which sits on a corner diagonally across from a gate leading into Red Square and the Kremlin.
The State Duma is located nearby, across the capital's most elegant shopping street. Elections to the Duma took place on Sunday, and Russian authorities had warned that terrorists might try to disrupt the balloting.
Television pictures showed a black Mercedes, its windows blown out and its door ajar, as white curtains billowed in the hotel's shattered windows.
Beside the car was what appeared to be a body lying on the ground, obstructed by a Christmas tree.
Dozens of police cordoned off the blast site with red tape and pushed reporters and other bystanders away. Three ambulances and three fire engines were at the scene.
The entrance to the normally crowded Okhotny Ryad metro station, located around the corner from the blast, was closed.
Two witnesses told Russian state television that they had their backs to the blast and heard a huge bang shortly before 11am.
"We felt a kind of whoosh, heard a bang, and saw smoke," said one, who was not identified.
Russians have been jittery about terrorist acts since a series of explosions in Moscow and southern Russia blamed on Chechen rebels.
Forty-four people were killed when a suicide bomber attacked a train in southern Russia last week. Altogether, close to 300 people have been killed in Russia in bombings and other attacks blamed on Chechens over the past year.