A bomb-rigged truck with government plates exploded in Lahore on Wednesday, killing one person in a heavily guarded neighborhood that is home to many government officials in the eastern Pakistani city.
Two TV stations quoting anonymous intelligence officials reported that authorities had arrested an Indian national in connection with the blast in the city, which is about 19 miles from the Indian border. Lahore's police chief Pervez Rathore told The Associated Press that his force had not detained an Indian, but said intelligence agencies could have done so without his knowledge.
Tensions between nuclear-armed India and Pakistan have risen sharply over the deadly terror attacks in Mumbai last month, which Indian authorities have blamed on Pakistan-based militants. Islamabad has promised to cooperate with New Delhi, but has said it has yet to share any evidence with it.
Dawn TV identified the Indian citizen as Satish Anand Shukla, of Calcutta, and said he was arrested after a cell phone intercept.
Pakistan and India have fought three wars over the last 60 years and their relationship is strained by mistrust.
India has long accused militants with links to Pakistani intelligence of terrorism on its soil. Islamabad has also alleged India is sponsoring terrorism in Pakistan.
Earlier, Umer Virk, the head of Lahore's Crime Investigation Department, said the target of the Lahore blast was likely a police officer who headed an operation that led to the death of a leader of the al-Qaida linked militant group Lashkar-e-Jhangvi in 2002, said
The officer escaped the explosion near his home, but it killed a Christian woman and wounded four of her relatives as they drove together to a Christmas function, Virk said.
The truck was obliterated, with pieces scattered for 200 yards, while the wall of a nearby house collapsed.
Rathore said the truck apparently gained access to the neighborhood because of its official plates. The area is walled off and filled with guards.
Lashkar-e-Jhangvi is a Sunni Muslim militant group blamed for killing scores of minority Shiites across Pakistan. Its members have also been accused of attacks against Westerners in Karachi, the slaying of U.S journalist Daniel Pearl in 2002 and the September truck bombing of the Marriott Hotel in Islamabad.
Separately, suspected extremists shot and wounded a Chinese engineer as he shopped at a market in the northwest, where a wave of militant attacks has taken place.
Islamist militants have carried out scores of bombings in the past two years, seeking to destabilize Pakistan's U.S.-allied secular government. Most of the attacks occur in its northwest regions bordering Afghanistan, where the army is fighting al-Qaida and Taliban militants.