Police said the suicide bomber and four people were killed and more than a dozen wounded in the blast in the Nowgam area on the outskirts of the state's summer capital Srinagar.

"We have five killed, including the suicide bomber," a police spokesman said, adding that more than 12 people were wounded, including five policemen.

"The car bomb is our first gift to Ghulam Nabi Azad," Abu Qudama, spokesman for Jaish-e-Moham-med, told the Kashmir News Service.

The explosion came just hours before the scheduled swearing-in of Ghulam Nabi Azad as the Himalayan state's new chief minister.

Azad was set to be sworn is as the Himalayan state's new chief minister, as part of a power-sharing deal between the regional Peoples Democratic Party and Azad's Congress party. The PDP's chief minister Mufti Mohammed Sayeed completed his three years in power on Wednesday.

Islamic militant group Jaish-e-Mohammed immediately claimed the blast in a telephone call to a local news agency. "Our suicide bomber targeted a security patrol," the spokesman for the group told the agency.

A police spokesman said investigators were uncertain of the intended target. "It is not an attack. Our policemen have foiled their (militant) attempts to carry out an attack," he said.

An AFP photographer at the scene said car parts were sent flying more than 100 meters from the site of the explosion, which also damaged some adjoining buildings. The suicide bomber was blown to pieces.

New Delhi, meanwhile, remained on high alert Wednesday during a massive police manhunt for those behind Saturday's bombings which tore apart a bus and two markets.

Officials said about 2,600 additional police have been brought in to bolster the city's 71,000-member force for the Hindu festival of Diwali, and the upcoming Muslim Eid-ul-Fitr celebrations at the end of the week.

Diwali celebrations took place amid heavy security on Tuesday. In spite of the pall cast by the bombings, Delhi residents defiantly celebrated the festival of lights with perhaps even more fervour than usual, setting off firecrackers well into the early hours of Wednesday.

Police said they are likely soon to release a sketch of a key suspect after interviewing passengers on a bus targeted for one of the bombings.

Investigators were hunting for a casually-dressed, unshaven man in his 20s whom witnesses saw slipping off the vehicle in the Okhla industrial area after leaving a bag which exploded minutes later.

Passengers were saved when the bus driver hurled the abandoned bag out a bus window.

Police said bags used in Saturday's two other blasts which killed 62 people -- in the Sarojini Nagar and Paharganj markets -- were of similar make. They were questioning shopkeepers in the hope of identifying the purchasers.