The blast hit the Vladikavkaz market at a time when it is usually crowded with buyers and traders [Reuters]

At least 16 people have been killed and 114 others wounded in an apparent car suicide bombing in a market in Vladikavkaz, a major city in Russia's North Caucasus region.

Russia said it was launching an investigation into what it described as an "act of terror" on Thursday, while Dmitry Medvedev, the president, vowed to capture the "bastards" who organised the attack.

"We will do everything to capture these monsters ... these bastards, who carried out a terrorist act on ordinary people," he was quoted by the RIA Novosti news agency as saying.

"We will do everything to find and punish them."

No group has yet claimed responsibility for the bombing - the deadliest attack since twin suicide bombings on Moscow metro network in March killed 40 people and wounded over 100.

Vladikavkaz is the capital of the Russian republic of North Ossetia, which lies in the restive North Caucasus region.

Schools evacuated

The bomb, which was said to be packed with metal bars, bolts and ball bearings, was detonated at the entrance to the city's market where buyers and traders were operating.

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Vladikavkaz's market and its surrounding blocks has been the target of several bomb attacks over the past decade or so, in which scores of people have died.

Neave Barker, Al Jazeera's correspondent in Moscow, said children were believed to be among the dead and injured.

According to the AFP news agency the death toll rose to 16 after an 18-month-old toddler died of his injuries.

Our correspondent said that the attack could have been a "message" from separatist fighters that "the authorities and the people of the North Caucasus remain as vulnerable as they were six years ago when the Beslan siege took place, despite an increase in counter-insurgency operations".

He added that local authorities in the province said they received an anonymous threat to blow up an unspecified school in Vladikavkaz on Thursday, leading to all schools and kindergartens being evacuated.

Vladimir Putin, the Russian prime minister, said the country must not let attacks like these continue.

"Criminals like those who acted today in the North Caucasus hope to sow hatred between our peoples. We have no right to let this happen," he said.

Scene of Beslan massacre

North Ossetia is seen as one of the Caucasus' more stable areas, unlike the republics of Chechnya and Dagestan, which see violence between separatists and Russian forces on a regular basis.

However, the republic does suffer from ethnic tensions and has seen a rise in unrest in recent months.

In November 2008, the mayor of the city was killed when an assassin shot him in the chest near his home.

It was also the scene of the 2004 Beslan massacre, in which Chechen separatist fighters took hundreds of hostages at a school - a siege that ended in the deaths of 330 people, around half of them children.

Unlike most other Caucasus provinces where Muslims make up the majority of the population, North Ossetia is predominantly Orthodox Christian.

The market attack came as Muslims were preparing to celebrate Eid al-Fitr, a holiday marking the end of the holy month of Ramadan.

Source: Al Jazeera and agencies