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ISTANBUL (Reuters) - A roadside bomb blew up a bus carrying Turkish military personnel and their families in Istanbul on Tuesday, killing five people, and a Kurdish separatist group claimed responsibility.
The attack -- the worst in Turkey's largest city since a double bomb blast killed 17 people in 2008 -- comes as the Turkish military boosts operations to staunch increasing separatist violence.
The remote-controlled explosive was detonated near a military housing complex in the district of Halkali. The dead included three sergeants, a lower-ranking soldier and a 17-year-old girl, the Anatolian state news agency said.
The blast wounded about a dozen people, said Istanbul's Provincial Governor Huseyin Avni Mutlu. "This is a terrorist attack, and the aim of the attack is clear -- to create divisions, tensions and despair," he told reporters.
The Kurdistan Freedom Hawks (TAK), which have carried out bombings in Turkey in the past, claimed responsibility for the blast, and said more attacks were imminent.
"This planned action of ours was completely directed against a military vehicle. Turkish security forces have used civilians as a shield in the past. The Turkish state is completely responsible for the loss of civilian (life) in this action," the group said in a statement.
The group is believed to have links with the Kurdistan Workers Party (PKK), the main separatist group operating in mainly Kurdish southeast Turkey. The PKK told Reuters separately its leadership had no information on who was behind the attack.
Kurdish separatists, based in northern Iraq, have increased attacks on military targets in the southeast in recent weeks after accusing the government of not being serious about promised reforms.
Fighting with PKK rebels has claimed the lives of more than 50 soldiers over the last two months. PKK guerrillas killed 11 soldiers at the weekend alone in one of the deadliest attacks in years, prompting Turkey to begin a major deployment of troops and elite forces along the Iraqi border on Monday.
Turkish bonds and the lira weakened on Tuesday.
"(It) looks like the terrorist organization is trying to move the battleground into large cities. If it will be the case it will hurt investors' sentiment in Turkey," said Ata Invest analyst Mehmet Ilgen in a note to clients.
Istanbul was hosting on Tuesday a meeting attended by the Croatian, Serbian and Turkish foreign ministers.
Television channels showed the bus's shattered windows and the wounded being taken to hospital after the blast, at about 7:30 am (0430 GMT). It was not clear how many passengers were on the bus or how many were military personnel.
Investors were also watching for any political fallout, as Prime Minister Tayyip Erdogan faces growing criticism for his government's failure to stop Kurdish rebel violence.
Erdogan's AK Party government has granted more political and cultural rights to minority Kurds in a bid to end the conflict, but the reforms were met with nationalist opposition and suffered a blow when the Constitutional Court last year banned the largest Kurdish party in parliament for links to the PKK.
Opposition parties have accused the government of making political decisions that have weakened the struggle against the PKK and have increased calls for bring forward elections scheduled for 2011.
"It's impossible to wipe out terrorism all at once. What the government can do is neutralize them, erase their marks," Erdogan told AK Party members, rejecting calls from nationalist politicians for the return of emergency rule in the southeast.
Some opinion polls have shown support falling for the AK Party, which has held power since 2002.
Intelligence-sharing with the United States has helped Turkey target rebels in northern Iraq, but Ankara indicated it wanted more cooperation.
"When the subject is terrorism, all parties and neighbors should be in solidarity. They must work with us, not just in words but in deeds," Foreign Minister Ahmet Davutoglu said.
The PKK said this month it had scrapped a year-old unilateral ceasefire and resumed attacks against Turkish forces because of military operations against it.
About 40,000 people have been killed since 1984 when the PKK took up arms to carve out an ethnic homeland in the southeast.
Additional reporting by Daren Butler and Ayla Jean Yackley in Istanbul, Writing by Thomas Grove; Editing by Mark Trevelyan