PESHAWAR Investigators searched a wrecked luxury hotel in Peshawar for evidence on Wednesday after a bold suicide bombing killed 11 people, including aid workers, in what the UN condemned as a 'heinous terrorist attack.'

Fifty people were also wounded in the attack.

No one immediately claimed responsibility for Tuesday's on the Peshawar Pearl Continental, but the blast followed Taliban threats to carry out major attacks in large cities to avenge an army offensive against insurgents in the nearby Swat Valley.

At least three suicide attackers shot their way past guards and set off the explosion late Tuesday outside the hotel, a favorite spot for foreigners and well-off Pakistanis and a site that the US was considering for its consulate.

The hotel is located near the residence of the Peshawar Corps Commander and the Commandant of Frontier Constabulary, which is presently occupied by NWFP's Inspector-General of Police Malik Naveed Khan.

Armed men first launched a frontal assault on the main entrance to the Pearl Continental, killing security guards. They then lowered down an electronic barrier so that an explosives-laden mini-truck could get in.

The assailants first killed the security guards on the main gate to lower the electronic barrier and then went inside the main parking lot, firing indiscriminately, police said.

'A mini-truck laden with explosives then entered the hotel premises and exploded in the main parking lot close to the main building,' Capital City Police Chief Safwat Ghayyir told Dawn.

'I was going for my night shift when I heard intense firing between the security guards and the armed men. Then there was a big explosion. I don't remember what happened next,' said Nasir, one of the wounded security guards at the hotel.

He said that three armed men, wearing military uniform and riding on a white-double cabin pick-up truck, started shooting at the security guards while one of them was firing into the air.

The same truck then drove into the parking lot and exploded, he said.

Ikram, an accountant at the hotel, said he saw armed men firing from a white colour double pick-up. 'I took refuge in the small mosque in the parking area.'

Police, quoting eyewitnesses, said the assailants were three in number and the explosion was carried out by a suicide bomber.

The attack reduced a section of the hotel to concrete rubble and twisted steel and left a huge crater in a parking lot.

Senior police official Safwat Ghayur said counterterrorism experts, police and intelligence agents were combing the rubble for clues Wednesday.

The Pearl Continental is the ritziest hotel in the frontier city of 2.2 million.

Relatively well-guarded and set back from the main road, it is near government buildings and overlooks a golf course and a historic fort.

Security camera footage showed the attackers in two vehicles, a white sedan and a small truck. The vehicles pull up to a guard post outside the hotel, with the car in front.

A puff of smoke then appears near the car window, and a guard standing at the post collapses, apparently shot. The vehicles then move into the hotel compound. A few seconds later, a flash and eruption of dust are visible, indicating a blast.

The truck was carrying more than half a ton of explosives, senior police officer Shafqatullah Malik estimated.

The chaotic scene echoed a bombing last year at Islamabad's Marriott Hotel that killed more than 50 people. Both hotels were favored places for foreigners and elite Pakistanis to stay and socialise, making them high-profile targets for militants despite tight security.

In Washington, two senior US officials said the State Department had been in negotiations with the hotel's owners to either purchase or sign a long-term lease for the facility to house a new American consulate in Peshawar.

The officials said they were not aware of any sign that US interest in the compound had played a role in its being targeted.

The officials spoke on condition of anonymity because the negotiations were not public and had not been completed. They said no immediate decision had been made on whether to go ahead with plans to base the consulate on the hotel grounds.

A member of the family that owns the Peshawar hotel and the Marriott in Islamabad said he was not aware of any negotiations with the US but that the Pearl Continental would be rebuilt.

'The process has already started,' Murtaza Hashwani said. 'They have started clearing the debris, and the engineering people are looking at the building. You cannot let these people defeat you.'

The exact death toll remained elusive Wednesday.

North West Frontier Province Information Minister Mian Iftikhar Hussain told The Associated Press early Wednesday that officials reported 11 fatalities. Other police and government officials could confirm only five dead.

The three attackers also died, said an intelligence official who spoke on condition of anonymity.

UN officials declined to comment Wednesday on whether they might scale back their programs in Pakistan. Such a move could have significant consequences because of a refugee crisis sparked by the military offensive in Swat.

'This attack has all the signatures of the Rescue 15 attack in Lahore. The same tactics appeared to have been repeated here,' one security official said.

'It was a massive car bombing,' Shafqat Malik of the Bomb Disposal Squad told reporters outside the hotel.

The explosion caused a 16 by 15 feet crater.

'I don't think we have ever had an explosion in Peshawar of this magnitude,' Senior Superintendent of Police Qazi Jameel said.

'It is too early to pin blame on a particular group. But this appears to have come from the same group that masterminded the Rescue 15 attack,' the security official said.

The CCPO said that a few suspects had been detained for questioning. 'Investigations are under way,' he said.