Pakistan's main Taliban faction has claimed responsibility for the attack on the U.S. consulate in Peshawar and threatened to carry out more attacks on Americans.
Among the seven people killed in the suicide attack were two guards working for the consulate in the garrison city of 2.5 million people and the capital of the country's North-West Frontier province.
"We accept the attacks on the American consulate. This is revenge for drone attacks," Tehreek-e-Taliban Pakistan spokesman Azam Tariq told media by telephone from an undisclosed location. "We have already told you that we have 2,800 to 3,000 fidayeen (suicide bombers). We will carry out more such attacks. We will target any place where there are Americans."
Police have closed off the area around the consulate in the urban business and residential setting along Khyber Road. "They came in two vehicles," said Bashir Ahmed Bilour, a minister in the North-West Frontier province government. "The militants were well-equipped. It was a well-organized attack."
Local media noted that the police and military would not say if any attackers got away during the ensuing fighting.
Dramatic footage on Pakistani television showed a loud explosion and a billowing white cloud rising high above trees. There followed rapid gunfire and soldiers rushing across a street to the scene with several soldiers helping a wounded man away from the area.
Later footage in the day showed a bombed-out building and several rows of destroyed motorcycles and bicycles. All U.S. citizens were accounted for and there was little damage to the consulate building, a State Department spokesman said.
The BBC reported that several men in cars tried to smash their way into the consulate but were blocked and then the explosions happened. Police told media that one of the men blew himself up close to the gate and then police opened fire after the blast.
Police also said they recovered "some unexploded material" around the site but gave no further details.
A witness told BBC that two armored vehicles parked outside the consulate caught fire.
"I saw attackers in two vehicles. Some of them carried rocket-propelled grenades," said the man.
The Pakistani Taliban were apparently aiming for a feat to match the one last December in Khost, Afghanistan, in which several CIA officials were killed, the BBC said.
Another reason for the attack could be to ease military pressure on Taliban militants in the Orakzai tribal district near Peshawar. Last month Pakistani security forces launched a major operation against the Taliban in the district whose Orakzai tribal elders vowed in 2008 to fight the Taliban.
Only hours before the consulate attack, suicide bombers killed 41 people and wounded more than 80 more attending a rally in the northwest district of Lower Dir next to the Afghanistan border where Pakistan has waged a major offensive against local Taliban insurgents.
The rally was organized by the secular Awami National Party to celebrate plans to rename North-West Frontier province as Khyber-Pakhtunkhwa. The new name honors the Pashtun majority population in the province and will replace the British colonial-rule name.
Dozens of Taliban fighters also set fire to eight NATO road tankers returning empty from supplying vehicle fuel to troops in Afghanistan. The attack happened before dawn in the Zakha Khel tribal district of the Khyber Pass, a local administration chief told a private TV station.
"They hurled petrol bombs then lobbed rockets and destroyed eight oil tankers," he said. There were no injuries during the attack that happened while the trucks were parked at a terminal.
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