Officials said they had several leads on the group behind the bombs that killed at least 61 people in crowded New Delhi markets on Saturday, and were checking an obscure Kashmiri group's claim of responsibility.
Many were still trying to trace dead or missing relatives and friends on Monday, but the city of 14 million was slowly getting back on its feet on the eve of Diwali, the Hindu celebration of the victory of good over evil, and a few days before Eid al-Fitr, one of the biggest days on the Muslim calendar.
Prime Minister Manmohan Singh, who visited survivors on Sunday and chaired an emergency cabinet meeting, blamed the coordinated blasts on terrorists but did not elaborate.
Analysts say the Islami Inqilabi Mahaz (Islamic Revolutionary Group), which said it carried out the attacks, is likely to be a front for the better known Pakistan-based separatist group Lashkar-e-Taiba.
The blasts could be aimed at derailing a slow-moving peace process between Hindu-majority India and Islamic Pakistan, which came close to war over Kashmir in 2002, they say.
Manmohan Singh (L) blamed the
blasts on terrorists
Early on Sunday, the two countries agreed to open border crossings in the disputed Himalayan region to help victims of this month's devastating earthquake.
"This is a Pakistani group and is a front organisation of Lashkar," said Ajai Sahni of New Delhi's Institute for Conflict Management.
Such fronts are often used to muddy the waters and deflect blame from their parent groups, he said.
"One way or the other, Lashkar is behind it."
Pakistani Information Minister Sheikh Rashid Ahmed said insurgents would not be allowed to disrupt the peace moves.
"The government of Pakistan and government of India and the whole world want that both nations should be friendly and solve their problems peacefully and amicably," he said on Sunday.
Although Delhi was coming back to relative normality on Monday, some scenes provided a heart-wrenching reminder of the carnage two days ago.
Pakistan's Sheikh Rashid Ahmed:
Peace moves not to be disrupted
In a hospital mortuary, families fought over bodies charred beyond recognition.
The Indian Express newspaper said three families claimed the bodies of two children - a three-year-old boy and an eight-year-old girl.
"Why are they doing this to me? Can't a father recognise his own child," sobbed one parent.
The families eventually agreed to cremate the bodies jointly on the condition that a DNA test would be conducted later to establish the identity of the children.
India has sounded a high alert across the country after the bombings.
Besides further attacks, another worry is the possible eruption of Hindu-Muslim strife because of the blasts, especially with the Muslim celebration of Eid probably due on Thursday. But there has been no sign of any religious tension.
India's robust stock markets also shrugged off the impact of the blasts and the benchmark Bombay index was up as much as 1.42% in early trade.
"These blasts will not have much impact on financial markets. Such security measures crop up from time to time, and by and large the government has been able to contain it," said Parthasarathi Mukherjee, head of treasury at UTI Bank, Mumbai.
There is an appeal for people
to stay away from public areas
"So, I do not think that this is an issue which in the long term would impact economic growth."
India has blamed previous attacks on Pakistan-based insurgents.
However, the country is also racked by scores of revolts and in May two blasts blamed on Sikh separatists killed one person and wounded dozens at Delhi cinemas.
This time, however, suspicion centres on Lashkar and other Kashmiri groups which are seen as having the skills and resources needed for such an attack.
But Kashmir's largest group, the Hizb-ul-Mujahideen, has said separatists would never strike at civilians.
Delhi's chief minister has appealed for people to stay away from public areas for the next few days ahead of Diwali and Eid.
While cheap hotels and lodges in a popular backpackers' area hit by one of Saturday's blasts reported a dramatic drop in foreign bookings, the scene at India Gate, a monument in the heart of the city, was like any other holiday on Sunday.
Dozens of teenagers played cricket on the lawns, and domestic and foreign tourists wandered around taking photographs.
"It is a sad event but life has to go on," said Meenakshi Dutta, visiting from Kolkata, formerly Calcutta.