A bomb exploded outside a car dealership in southern Pakistan (search) Saturday, killing two people and wounding three, police said.

The blast occurred in the area where Pakistani police had arrested important Al Qaeda operative Ramzi Binalshibh after a shootout in September 2002.

Munir Sheikh, a senior police official, said the explosion damaged three cars and shop windows at the business in the commercial area of Karachi, the capital of Pakistan's southern Sindh province.

Sheikh said police were investigating the blast and gave no other details.

It was not immediately clear who planted the bomb outside the business of Haji Akram.

"I have no enemy in the city... I don't know who put the bomb outside my shop," Akram told The Associated Press.

Karachi (search), Pakistan's largest city with a population of 14 million, has been the scene of several terrorist attacks in the recent years, mostly blamed on Islamic militants.

Pakistan is a key ally of the United States in its war on terror and the latest explosion came about two weeks after Pakistani security agencies captured several Al Qaeda suspects, including Ahmed Khalfan Ghailani, a Tanzanian indicted an alleged role in the 1998 bombings of U.S. embassies in East Africa.