Pakistani investigators conducted tests on Tuesday to try to determine what type of explosives were used in a suicide car bombing outside the Danish embassy that killed six people and revived security fears.

Monday's bombing in the capital, Islamabad, followed a relative lull in militant attacks since a new government came to power after February elections intent on negotiating an end to violence.

The blast will heighten concern about the safety of foreigners in Pakistan.

The attack coincided with a fresh bout of intense speculation about how long U.S. ally President Pervez Musharraf can hang onto office as he lacks support from the new government.

Western allies are concerned about prolonged political instability in a nuclear-armed Muslim state that is facing growing economic woes.

A team of police and intelligence agents has been set up to investigate the blast in an upmarket residential neighbourhood that left a three-foot (1 metre) crater in the road and damaged many houses in the area.

The six people killed were Pakistani and about 25 people were wounded.

"A joint team has been set up and they are interrogating some local people, but there have been no arrests," said the police officer in charge of the investigation, Mohammad Ashraf Shah.

"Samples have been sent to the laboratory to determine what type of explosive was used," he said.

Pakistan's main stock index, battered in recent weeks by worries over political stability including the fate of President Pervez Musharraf, who has been under pressure from opponents to step down, rose in early trade.

Dealers said stock investors had factored in political risk and were more interested in the continuation of investor-friendly policies. Currency dealers said the blast had not affected trade in the rupee

Initial suspicion for the attack has fallen on Islamist militants out to attack Denmark over cartoons of the Prophet Mohammad that Danish newspapers published in late 2005.

The cartoons, considered blasphemous by Muslims, sparked deadly protests and attacks on Danish missions. The embassy in Islamabad was temporarily shut in 2006 after protests and it was reported to have received threats.

"It seems apparent the attack on the embassy was carried out by zealots behind the campaign," the News newspaper said, adding that more needed to be done to tackle extremism.

DOUBT

But a security analyst questioned the cartoon link.

"I have a problem connecting it with the cartoons," said retired Lieutenant General Asad Durrani, the former head of the Inter-Services Intelligence agency. "They were such a long time ago and at this time, it doesn't make any sense."

Baitullah Mehsud, a militant chief based on the lawless Afghan border and blamed for string of attacks, including the assassination of former prime minister Benazir Bhutto on December 27, was unlikely to have been behind the attack, he said.

Mehsud, is on the verge of striking a peace pact with the government.

"Right now, those people also want this peace deal," Durrani said. "If there are any other factions that do not want this peace process to go on, one can imagine them doing it."

The government's policy to negotiate peace is almost universally supported in Pakistan but has raised questions in the United States and among some of Pakistan's other allies, who fear deals will free up Taliban and al Qaeda militants to intensify their war against the West in Afghanistan and beyond.

In Washington, a White House spokeswoman condemned the bombing and, in an apparent reference to the government's efforts to negotiate peace, said militants could not be allowed havens.

"It does serve as a reminder to the government of Pakistan and to all governments that terrorism is real, they cannot be allowed to have safe havens," spokeswoman Dana Perino said.