The blast on Tuesday in the military-run southeast Asian nation comes less than a week after a convoy was attacked in the south of the country, killing eight people and wounding 15.

   

"The explosion was on the ground floor of Zaygyo Market. People nearby heard the single explosion around 4.15pm (0945 GMT)," said an official from the Mandalay general hospital.

   

She said two young women were killed and 16 others were wounded in the blast, which appeared to come from a store room.

   

There was no immediate comment from government officials on the cause of the blast.

 

Confusion

 

A resident, who was in the market at the time of the blast, said there was confusion and panic afterwards.

  

"At first we thought it was a transformer explosion. But then we heard people saying it was a bomb so we ran out"

Mandalay resident

"At first we thought it was a transformer explosion," he said. "But then we heard people saying it was a bomb, so we ran out."

   

It was the first major explosion in many years in Mandalay, Myanmar's second city as well as its cultural and commercial hub. The city lies about 690km north of the capital Yangon.

   

A few small bomb blasts have hit the capital in recent months, although nobody has been seriously injured.

 

A bomb, which exploded at a Yangon hotel on 19 March, was claimed by a group called the Vigorous Burmese Student Warriors (VBSW), which threatened more attacks unless the military government released all political prisoners.

  

Myanmar has been ruled by the military since a 1960s coup.