Suicide bomber kills 41 near Pakistan's Swat

ISLAMABAD (Reuters) - A suicide bomber killed 41 people in an attack on a Pakistani military convoy passing through a market on Monday as the Taliban claimed responsibility for a weekend raid on the army's headquarters.

Militant attacks have intensified over the past week as the army prepares to launch a ground offensive on the al Qaeda-linked fighters' South Waziristan stronghold.

A suicide bomber on foot leapt at a military vehicle in Shangla district, near the Swat valley, security officials said.

"The bomber hit one of three military vehicles that were passing through the busiest market in the district," top Shangla police official, Khan Bahadur Khan, said by telephone.

Provincial Information Minister Mian Iftikhar Hussain said 41 people had been killed, including 35 civilians and six soldiers, and 45 people were wounded.

The army has largely driven the militants out of Swat and their leader, Baitullah Mehsud, was killed by a missile fired by a U.S. drone aircraft in August.

The militants are hitting back.

The army said Pakistani Taliban commander Wali-ur-Rehman was behind Saturday's attack on its headquarters in Rawalpindi, near Islamabad.

Commandos stormed an office building near the headquarters and rescued 39 people taken hostage by gunmen after an attack at a main gate of the headquarters.

Nine militants and three hostages were killed in the violence in Rawalpindi while the number of soldiers killed rose to 11, with the deaths of three wounded men, a military official said.

The 10 attackers had wanted to take senior military officers hostage to demand the release of a "long list" of captured militants, said army spokesman Major General Athar Abbas.

Abbas said a telephone conversation had been intercepted between Reham and one of his subordinates.

"It revealed that this attack was planned in the area of South Waziristan," Abbas told a news conference, adding Rehman had told his subordinate to pray for the attackers' success.

"REVENGE FOR MARTYRS"

The leader of the attack, a former soldier who deserted in 2004 and joined a militant group based in Punjab province, was the only attacker captured alive but wounded, Abbas said.

The man, identified as Aqeel, also known as Dr Usman, was from Punjab, he said.

Abbas said that while the Taliban and Punjabi militant groups had links there were no militant "safe havens" in Punjab, Pakistan's biggest and economically most important province.

Earlier on Monday, Pakistani Taliban spokesman Azam Tariq claimed responsibility and threatened more attacks.

"It was carried out by our Punjab unit," Tariq said by telephone. "We will take revenge for our martyrs and will carry out more attacks, whether it's the GHQ or something bigger," he said, referring to the army's General Headquarters.

A ground offensive in South Waziristan could be the army's toughest test since the militants turned on the state.

The army has not said when it would begin but Interior Minister Rehman Malik said on the weekend it was "imminent."

The military has been conducting air and artillery strikes for months, while moving troops, blockading the region and trying to win over factions.

Military aircraft attacked in the region on Monday killing up to five militants, an intelligence official said, a day after about 16 militants were killed in air strikes.

"There is no mercy for them because our determination and resolve is to flush them out," Malik told Reuters in an interview in Singapore. "They have no room in Pakistan, I promise you."

About 28,000 troops have been put in place to take on an estimated 10,000 hard-core Taliban, army officials said earlier.

Monday's blast, the fourth big attack in a week, triggered selling on Pakistan's main stock market, which fell 1.3 percent.

"The market witnessed a correction due to security concerns across the country," said Furqan Punjabi, analyst at Topline Securities Ltd.

(Additional reporting by Augustine Anthony, Kamran Haider, Junaid Khan, Sahibzada Bahauddin, Hafiz Wazir, Faisal Aziz, Sahar Ahmed and Saeed Azhar and Sanjeev Miglani in Singapore; Editing by Alex Richardson)