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By Biswajyoti Das

GUWAHATI, India, May 26 (Reuters) - A bomb hidden in a rickshaw exploded in a crowded market place in India's northeastern state of Assam on Saturday, killing seven people and wounding 18, police said.

Authorities said the separatist United Liberation Front of Asom (ULFA) was behind the attack in the busy market area of Athgaon in central Guwahati, the state's main city.

"It is absolutely clear the ULFA is behind this attack," Sibabrata Kakati, a police officer said.

Three dead bodies lay on the blood splattered road which was littered with parts of human flesh. The body of the rickshaw driver remained mangled in his vehicle where the bomb had been hidden.

Nearby vehicles were also damaged by the impact of the blast which took place a day ahead of celebrations to mark the state government's first year in office after elections.

Fire engines rushed to the site, while local traders quickly placed the dead and injured on wooden hand carts and in rickshaws, evacuating them to a nearby hospital.

"Someone was carrying a gas cylinder at the time of the explosion which caught fire and that caused maximum damage," a senior police officer said.

Hospital sources said three of the 18 injured were in a critical condition, warning that the death toll could increase.

The ULFA says it is fighting for the independence of Assam, which is rich in oil, natural gas and tea. The group accuses New Delhi of taking away its mineral and forest resources while neglecting the local population.

More than 20,000 people have been killed since the insurgency began in 1979.

Shops and markets near the scene of the blast shut down in protest against the killings and people came out in streets shouting slogans against the rebels for the killings and against the police for not providing adequate security.

Security across the city of more than 1.5 million people has been tightened and police vehicles were moving around the city, telling residents on loudspeakers to be alert of any suspicious activity.

A 9kg (20-lb) bomb was discovered on a passenger train in Kokrajhar in western Assam on Saturday.

Authorities said that intelligence inputs indicated that more attacks were likely a day ahead of the celebrations to mark the state government's first year in power after elections.

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