Pakistan - A suicide attacker set off a car bomb at a police checkpoint in the Pakistani city of Peshawar on Saturday, killing 10 people, officials said.

The city, near the Afghan border, has been bombed several times since the army began an offensive against the Taliban in South Waziristan last month. Militants have hit back by stepping up attacks on towns and cities, killing several hundred people.

The car bomber approached a barrier near the police check post and then it exploded, city official Sahibzada Anis told Reuters. Ten people were killed and more than 20 wounded, he said. Police said two of their men were among the dead.

Pieces of the bomber's car littered the road. Several other vehicles were badly damaged, with one flipped onto its roof. There was no immediate claim of responsibility for the blast.

The army offensive in South Waziristan is aimed at rooting out Pakistani Taliban militants who stepped up their war on the security forces in 2007.

The United States, weighing options as it struggles to stabilize Afghanistan, says Pakistani action against militants in border enclaves is vital for its Afghan effort.

TALIBAN CLAIM

On Friday, a suicide car bomb exploded at an office of Pakistan's main intelligence agency in Peshawar, killing 17 people.

The Taliban said it carried out that attack, as well as a suicide bombing at a police station in the northwestern town of Bannu on Friday, in which seven people were killed.

We will carry out similar attacks in other parts of the country, Qari Hussain Mehsud, a senior Pakistani Taliban member and a cousin of Taliban chief Hakimullah Mehsud, told Reuters by telephone. Hussain is known as the mentor of suicide bombers.

The military says it has killed more than 520 militants in the offensive in South Waziristan, including seven on Saturday.

Soldiers have advanced into the militant heartland from three directions and captured several Taliban base areas in the region of barren mountains, ravines and patchy forest.

There has been no independent verification of casualties. Reporters and other independent observers are not allowed into the conflict zone except on occasional trips with the military.

The violence in recent weeks has rattled investors and the main stock index has lost about 5 percent since the offensive began.

However, it ended 1.60 percent higher at 9,067.17 on Friday after the International Monetary Fund (IMF) said the previous day the economy showed signs of recovery but risks remained.

Finance Minister Shaukat Tarin told Reuters the IMF had expressed concern about how insecurity could affect the economy. (Additional reporting by Augustine Anthony, Alamgir Bitani; Writing by Robert Birsel; editing by Mark Trevelyan)

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