The device, hidden in the saddle of a bicycle and left near a bus stop often used by soldiers, exploded at around 8:00 am (0500 GMT), the local prosecutors' office said in a statement. One of those wounded was a soldier.

The blast also shattered the windows of two shops and an apartment building, according to the television images from the scene. Two of the injured were in serious condition in hospital.

There was no immediate claim of responsibility, but Diyarbakir is a hotbed of the outlawed separatist Kurdistan Workers Party (PKK).

"The way the incident happened and the type of explosive used indicates who did it," Interior Minister Osman Gunes said, in apparent reference to the PKK.

"We will make a more detailed statement after experts have completed their tests," he said, according to Anatolia news agency.

The army has launched a large-scale crackdown against the PKK in the east and southeast and amassed troops at the border with Iraq, where the militants take refuge.

The army has also called for a cross-border operation to destroy PKK bases in northern Iraq, where, officials say, the rebels obtain weapons and explosives for attacks in Turkey.

The PKK on Tuesday proposed a ceasefire if the government agreed to end army operations against the group.

The government has rejected previous truce offers from the PKK, listed as a terrorist organisation by Ankara and much of the international community.

The PKK took up arms for Kurdish self-rule in the southeast in 1984. The conflict has claimed more than 37,000 lives.