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At least 16 people have been killed and hundreds injured.
Manmohan Singh, the Indian prime minister, pledged punishment of those responsible for the “dastardly act”.
“The Government is committed to combat such cowardly terror attacks”, said Sushilkumar Shinde, the union home minister .
Officials from the National Investigation Agency and commandos of the National Security Guard hunted on Friday for perpetrators of the twin bomb attacks near a cinema and a bus stand in a busy neighbourhood of the city.
Top state police officer V Dinesh Reddy said improvised explosive devices with nitrogen compound were used in the blasts, which he blamed on a “terrorist network”.
Ban Ki-Moon, the UN secretary-general, “strongly condemn[ed] the indiscriminate attacks”.
The city has been a repeated target of terror attacks – a blast outside a temple in 2000 killed two people, while in 2007, 40 people were killed in bombings in the city.
Thursday’s blast occurred on the same day as the Indian Parliament opened for the budget session.
A cricket test match between India and Australia, scheduled to start in Hyderabad on March 2 has not been rescheduled.