"It seems that the house was being used by terrorists. We are taking utmost care in removing the rubble. Bomb-disposal officials have arrived at the scene to determine the exact nature of the explosion."

Two people were arrested at the scene of the blast, police said.

"Police believe that this was terrorist cell hiding out in Karachi," Al Jazeera's Alan Fisher, reporting from Islamabad, said.

'Suspects from Swat'

Rehman Malik, Pakistan's interior minister, said the people living in the house were from Swat, a district in the North West Frontier Province where the Pakistani military last year launched an operation against Taliban fighters.

"According to reports they were all asleep in the courtyard when this blast occurred," he said.

The same account was given by a suspect, who was injured in the blast and later captured by police, the Express News television channel reported.

 

Express News cited unnamed officials as saying that the suspect - identified by a single name, Imran - told investigators that three suicide bombers had put on explosive vests and one went off accidentally as its wearer was dozing.

Karachi has largely avoided the suspected Taliban attacks experienced in the rest of the country, but there have been outbreaks of sectarian violence between Sunni and Shia Muslims.

A bomb attack on December 28 hit a procession of Shia Muslims marking the Ashoura ceremony leaving more than 40 people dead.

Al Jazeera's Fisher said: "There has always been a concern about Karachi because it has been seen by many as the gateway that people use to get in and out of the country.

"Finance has been raised for some of the groups behind the bombings in Pakistan in Karachi, there is a support network there.

"There is a concern, given the attack on the parade in the city, this may be the start of more attacks in Karachi." 

Attacks across Pakistan have intensified in recent months in an apparent response to a military offensive against the Pakistani Taliban in South Waziristan.