Rail officials said police had found two suitcases filled with flammable material at the scene of the incident near Panipat town, about 100km north of the Indian capital New Delhi.
One was found inside a burned coach while the other was on the rail track.
"We have eyewitnesses who said they heard two blasts," VN Mathur, general manager of India's Northern Railways, said.
"Indian television channels showed rescue workers sifting through the charred remains of the carriages"
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Mathur said dozens of bodies have been recovered from the burned-out coaches.
Sriprakash Jaiswal, India's junior home minister, said the bombs were not powerful, and were simply intended to start a fire "as part of a conspiracy."
"The purpose is to disturb communal harmony, India's stability and to disturb the peace process between India and Pakistan."
The Samjhauta Express, which connects the capital to the northern Pakistani city of Lahore, was en route to Attari, the last station before the border with Pakistan, where passengers alight and cross the border on foot before boarding another train to complete their journey.
Indian television channels showed rescue workers sifting through the charred remains of the carriages.
Because of security concerns, trains are often kept sealed with doors locked and bars over many of the windows, it is thought many passengers may have been trapped inside the burning cars.
|An Indian news channel reported that petrol |
bombs caused the deadly explosion [AFP]
However many Indian trains also suffer from chronic overcrowding with passengers often hanging outside the carriages.
India's Times Now news channel said two petrol bombs were believed to have exploded, adding that it took one and a half hours for rescue workers to arrive at the scene at the village of Deewana, five kilometres from Panipat.
A top state government official said most of the victims were Pakistanis but included some Indian security personnel.
The fire immediately evoked memories of a fire aboard another train in the western state of Gujarat in 2002.
That blaze, blamed on Muslim gangs, killed 60 Hindus returning from a religious pilgrimage.
It triggered one of India's worst outbreaks of sectarian violence in recent years, as Hindu mobs went on the rampage leaving more than 1,000 people dead, most of them Muslims.
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Pervez Musharraf, Pakistan's president, condemned the attack as an act of terrorism and said it would only stiffen resolve to pursue the peace process.
A government statement said: "The president underscored the need for the leadership of Pakistan and India to move forward undeterred in the quest for dispute resolution and lasting peace in the region.
"He said that we will not allow elements which want to sabotage the ongoing peace process [to] succeed in their nefarious designs."
Meanwhile, Pakistan said its foreign minister would go ahead with a trip to India on Tuesday as planned.
Hkursheed Mahmoud Kasuri is due to meet his Indian counterpart for talks on the tentative peace process between the two countries.
"This kind of incident can't stop good and positive relations between India and Pakistan," said Sheikh Rashid Ahmed, Pakistan's railways minister, although he added security would be increased on the Pakistan part of the line.