The decision to release them was due to a lack of evidence, the source said.

The four men were arrested on Friday, 24 hours after the attack that killed five people and wounded 68 in the south-eastern city.

Targeting a passing army vehicle carrying some 50 soldiers, four of the dead were high school students attending classes at a nearby private school.

No one has claimed responsibility, but senior officials put the blame on the the separatist Kurdistan Workers' Party (PKK), listed as a terrorist organisation by Turkey and much of the international community.

Prime Minister Recep Tayyip Erdogan called the attack a "betrayal" of Kurds by the aggressors.

Diyarbakir was the target of a 2006 explosion that killed 10 people and was also blamed on the PKK.

The PKK, which has waged a bloody 23-year campaign for Kurdish self-rule in southeast Turkey, had threatened to retaliate against Turkish air strikes on its bases in neighbouring northern Iraq last month.

The Turkish military has confirmed three air strikes against PKK targets in northern Iraq since December 16, conducted with US intelligence assistance.

It has said at least 150 militants were killed and more than 200 PKK positions destroyed.

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