No one has yet claimed responsibility for the deadly attack Thursday near a military base in city centre, but first suspicions fell on the outlawed Kurdistan Workers' Party (PKK), waging a two-decade separatist campaign in the southeast.

"Four people have been taken into custody as part of efforts to identify and catch the perpetrators. Several lines of investigation are being pursued," Diyarbakir's chief prosecutor Durdu Kavak said in a statement.

In Ankara, Prime Minister Recep Tayyip Erdogan said more suspects could be detained over the deadly blast for which he fingered blame on the PKK, listed as a terrorist group by Ankara and much of the international community.

"The terrorist organisation has and never will represent our Kurdish citizens... We will continue to fight them with determination and without concessions," he said in televised remarks.

"This is an attack against our unity and solidarity," he added.

The PKK, fighting for Kurdish self-rule in southeastern Turkey since 1984, had threatened to retaliate against Turkish air strikes on its bases in northern Iraq last month.

Thursday's attack saw a bomb-laden car set off by remote control on a road in central Diyarbakir, about 100 metres (yards) from a military facility, as an army vehicle carrying some 50 soldiers was passing by.

Four of the dead were high school students attending classes at a nearby private school to prepare for university exams and the wounded included about 30 soldiers.

The Turkish media suggested Friday that police believed the blast was caused by a plastic explosive of a type known to be widely used by the PKK.

As part of stepped up security measures after the Diyarbakir blast, police in Van, eastern Turkey, seized 50 kilogrammes (110 pounds) of explosives, grenades and home-made landmines in a minibus abandoned in an empty lot, the Anatolia news agency reported. An investigation was underway.

Turkey's main Kurdish party, the Democratic Society Party (DTP), condemned the attack as a "provocation" while 45 non-governmental organizations from Diyarbakir urged the government in a joint statement to catch the perpetrators at once.

Agriculture Minister Mehdi Eker, himself a Kurd from Diyarbakir, said the blast would not weaken the government's determination to undertake reforms to improve the rights of the country's Kurds.

"We will fight terrorism on one hand and carry out reforms on the other hand to make Turkey more democratic," he told reporters in Diyarbakir.

Turkish army chief Yasar Buyukanit was expected to fly in later in the day while Erdogan said he would visit the city on Saturday.

Thursday's attack came as the Turkish army, assisted by US intelligence, stepped up action against PKK rebels who use neighbouring northern Iraq as a springboard for cross-border attacks inside Turkey.

The military has confirmed three air strikes on PKK positions in northern Iraq since December 16, in addition to a land operation in northern Iraq to prevent a group of rebels from infiltrating Turkey.

Local Iraqi officials have reported two other air raids.

At least 150 militants have been killed and more than 200 PKK positions destroyed in the raids so far, the Turkish military said.

PKK rebels have been blamed for several bomb attacks in Diyarbakir and other major cities in the recent past, including one in June near a bus stop in central Diyarbakir that wounded seven people.

In 2006, 10 people, including seven children, were killed and 14 injured in a blast at a crowded city park, which officials also blamed on a PKK bomb.

More than 37,000 people have been killed since the PKK took up arms in 1984.