Officials said clues pointed at separatist Kurdish rebels as the perpetrators of the deadliest attack against civilians in Turkey since 2003, when 63 people were killed in four suicide bombings in Istanbul blamed on Al-Qaeda.

The Turkish media said the attacks late Sunday appeared to be in retaliation for a crackdown on the outlawed Kurdistan Workers' Party (PKK) as Prime Minister Recep Tayyip Erdogan pledged a firm response to the "savagery."

Istanbul Governor Muammer Guler put the death toll at 17, five of them children, and warned it could rise with six people in critical condition.

The attack raised tensions ahead of a crucial meeting of the Constitutional Court on whether to ban Erdogan's Islamist-rooted Justice and Development Party (AKP) for undermining Turkey's secular system.

A decision to outlaw the AKP could plunge the country into political crisis.

Both bombs were planted in concrete rubbish containers on a crowded street lined with shops and cafes in the popular Gungoren neighbourhood on Istanbul's European side, officials said.

A small bomb went off around 10:00 p.m. (1900 GMT) Sunday, creating the initial panic.

A second, more powerful explosion followed about 10 minutes later, some 50 metres (yards) away, as passers-by and residents milled around the site of the first explosion.

The second bomb claimed all the lives, including that of a 12-year-old girl hit in the heart by a piece of shrapnel as she stood on her fourth-storey balcony, Anatolia news agency reported.

There were scenes of panic with people covered in blood fleeing the area littered with debris and shattered glass.

"People gathered after the first blast. There was a real crowd. Five to 10 minutes later there was another one, much stronger than the first," resident Alaattin Hatayoglu told Anatolia.

"The building I was in was shaking. People were wounded in a 40-metre radius," he said.

Asked whether the PKK was responsible, Governor Guler said, "a link is seen with the separatist organisation" and police are working on it, Anatolia reported.

But a senior Kurdish militant denied any PKK involvement.

"The Kurdish liberation movement is not involved in this attack," Zubeyir Aydar told the pro-PKK Firat news agency.

He said the attack was the work of "sinister forces" timed to coincide with the AKP trial and the pending case against the shadowy "Ergenekon" nationalist group alleged to have organised attacks and plotted assassinations to create chaos and prompt a military coup against Erdogan's government.

The Turkish army has stepped up operations against the PKK, striking the rebels both inside Turkey and in neighbouring northern Iraq, where they take refuge.

Turkish jets bombed PKK camps in the Qandil mountains in northern Iraq, a major rebel stronghold, on Sunday morning.

Erdogan, who cancelled a weekly cabinet meeting and headed to Istanbul, pledged that the perpetrators would be caught and punished.

"Those responsible for this savagery, wherever they are, will not escape the end that awaits them," he said. "The strongest response our nation will give to this attack... will be to strengthen our unity."

The European Union, NATO and Western embassies in Ankara condemned the bombings.

At about the same time as the Istanbul attack, a Kurdish militant hurled a hand grenade at a police station in Bingol, a provincial capital in Turkey's mainly Kurdish southeast, before being shot dead, officials said.

Two other militants who took part in the attack were wounded and captured.

The PKK, listed as a terrorist group by Turkey and much of the international community, took up arms for Kurdish self-rule in the southeast in 1984, sparking a conflict that has claimed more than 37,000 lives.

Islamist and leftist groups have also struck in the past in Turkey's biggest city.