ISLAMABAD - A car bomb near the home of a Pakistani provincial government minister killed 20 people on Tuesday, a police official said, in another sign authorities are struggling against Taliban militants bent on grabbing power.

Militants who want no Western influence in nuclear-armed Pakistan, which Washington sees as critical in the battle against Islamist hardliners in Afghanistan, have not let up attacks, despite security crackdowns in their strongholds.

The blast took place in the town of Dera Ghazi Khan in a market, the kind of site frequently targeted by militants seeking to inflict maximum casualties.

It was near a market and several shops have collapsed, said Tariq Gurmani, a resident of the Punjab province town, adding he had seen several wounded people.

The attack was another potent reminder President Asif Ali Zardari's weak civilian government has yet to devise a strategy to defeat militants who want to tightly control society -- with public whippings and executions of those deemed immoral.

It was a car bomb. About 20 people have been killed and 50 wounded, senior police official Mubarak Ali Athar told reporters.

Militants have killed hundreds of people in bombings since an October clampdown in South Waziristan -- part of what is seen as a global hub for militants -- that authorities said dealt a major blow to the Taliban.

The military has ruled for more than half of Pakistan's 62-year history and no civilian government has ever served out a full term, earning the country the reputation of an unstable state.

The all-powerful army is seen as the institution best able to unite politically turbulent Pakistan during crises, even though military coups have hurt the country's democratic credentials.

BRAZEN ATTACKS BY MILITANTS

But its vulnerability to increasingly daring militants became clear this month when suicide bombers and gunmen killed at least 40 people in an attack on a mosque near army headquarters, 30 minutes from the capital Islamabad.

Pakistan's bloodshed has hurt confidence in an economy in virtual recession. Investors don't expect violence to ease anytime soon and have factored it into trading.

Stocks slid lower on selling toward the end of Tuesday's session after news of the car bomb. The Karachi Stock Exchange (KSE) benchmark 100-share index ended 0.15 percent lower at 9,266.04.

The United States believes Pakistan's military has no intention of trying to seize power, U.S. Central Command chief General David Petraeus said during a visit to the ally.

In a briefing with Pakistani journalists in Islamabad, Petraeus said Pakistan's military had told him it was not interested in destabilizing the elected civilian government.

I have seen no indication that (army chief) General Ashfaq Kayani is entertaining such a notion, local newspapers on Tuesday quoted Petraeus as telling reporters at the U.S. ambassador's residence when asked about his meeting with Kayani.

Whenever we have talked to them they say they are committed to democratically elected civilian government.

Kayani is seen as a professional soldier who has vowed to keep the army out of politics. Zardari, who has been at odds with the military, has called for urgent action to fight the growing threat from the Taliban.

Some militants are fighting the government but others cross into Afghanistan to attack U.S.-led troops from tribal strongholds with forbidding mountain terrain.

Analysts say Pakistan resists pressure to crack down on those types of fighters because it sees them as leverage against the influence of its enemy and fellow nuclear power India in Afghanistan.

Pakistan's APP news agency cited Zardari as saying extremism and militancy was gnawing society at the core and the writ of the government must be established at all costs.

Failure in Afghanistan could seriously damage the presidency of Barack Obama, who is sending 30,000 more troops there.

Pakistan fears there will be dangerous consequences if the United States hastily withdraws from Afghanistan, as it did after the war against Soviet occupation troops ended in 1989, leaving the country to implode into a civil war that eventually saw the Afghan Taliban sweep to power, raising hopes of stability.

(Additional reporting by Zeeshan Haider; Editing by Jerry Norton)

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