ISLAMABAD, Nov 8 (Reuters) - A blast ripped through a busy market on the outskirts of Pakistan's northwestern city of Peshawar on Sunday, causing several casualties, police said.

"We don't know the nature of the blast but there are many casualties. There may be a few deaths," said Shah Sawar Khan, a police official in Matni area where the blast took place.

Islamist militants have unleashed a campaign of bomb and suicide attacks in Pakistan in recent weeks in retaliation for a major offensive launched by security forces in their main bastion, South Waziristan, on the Afghan border.

Last month, more than 100 people were killed in a car bombing in Peshawar in the deadliest attack in the country in two years. (For more Reuters coverage of Afghanistan and Pakistan, see: http://www.reuters.com/news/globalcoverage/afghanistanpakistan)

(Reporting by Zeeshan Haider; Editing by Sanjeev Miglani)

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