At least 18 people were killed and at least 70 injured as serial blasts ripped through three busy market areas in New Delhi on Saturday, officials said.

Police said five blasts took place in the city's crowded Ghaffar Market, Connaught Place and Greater Kailash areas within 40 minutes beginning at 6:15 pm (1245 GMT).

Delhi police chief YS Dadwal said a majority of the casualties were reported from Ghaffar Market and Connaught Place.

Confirming that the deaths were the result of a terrorist attack, Federal Home Minister Shivraj Patil said "people should maintain calm, social harmony and understanding.

"Let us jointly fight the tragedy," Patil said, vowing that the culprits would be severely dealt with under the law.

The NDTV network reported that three unexploded bombs were defused in the India Gate area (one of the highest security zones in the country) and the Regal cinema hall in Connaught Place.

The blasts took place in busy areas that were crowded with shoppers on the weekend, and doctors treating the wounded at hospitals said the death toll could rise as some of the 70 injured were in a critical condition.

The city was placed on high alert as security was strengthened, and all markets in the city were ordered to shut.

A Muslim militant group Indian Mujahideen claimed responsibility for the attacks.

The same group - which Indian police believe to be a front for the banned Students Islamic Movement of India - had also claimed responsibility for serial bombings in May and July in the cities of Jaipur and Ahmedabad, where 119 lives were lost.

The first explosion rocked the Ghaffar market which was bustling with shoppers.

Some witnesses said that the explosive was planted in an auto-rickshaw.

Roshan Lal, a witness at Gaffar Market, told the IANS news agency: "The auto rickshaw was lifted into the air by the impact of the blast and I saw bodies flying in every direction."

This was followed by two blasts in Connaught Place at a central park and near a metro station, and another two in the Greater Kailash market area.

While at least eight people were believed to have been killed in Ghaffar market, four or five deaths occurred in Connaught Place.

The explosives were planted in dustbins in Connaught place area while in Greater Kailash one was in dustbin and another on a bicycle.

According to the Delhi police, two men were detained from the Connaught Place area soon after the blasts.

Police were also questioning a 12-year old balloon seller who may have seen a suspected terrorist planting one of the bombs.

The Indian Prime Minister Manmohan Singh held an emergency cabinet meeting as major cities across India were placed on high alert.

Pakistani President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani strongly condemned Saturday's blasts, expressing their shock and grief over "the loss of precious human lives," according to the state-run Associated Press of Pakistan.

"The elements involved in such heinous act are enemies of humanity," Gilani said.

The US also condemned the terrorist attacks and extended sympathies to the families of the victims.

"There is no justification for the vicious murder of innocent people," US envoy to India David Mulford said in a statement. "The US stands shoulder to shoulder with India in the fight against terror," he said.

India is among the countries worst affected by terrorism. More than 650 people have been killed in terrorist attacks in Indian cities over the past eight years.