PESHAWAR, Pakistan - Scores of bloodied and bandaged victims in shock filled hospital beds after a suicide car bomber destroyed a two-story hotel Friday, killing 29 people and underscoring the relentless threat to security in Pakistan's northwestern region that is home to the Taliban and al Qaeda.

The blast on the outskirts of rough-and-tumble Kohat town wounded 55 others -- the second attack in two days in the area not far from the Afghan border. The suicide strike occurred just days before Muslims from both the Sunni and Shiite sects celebrate the end of the fasting month of Ramadan.

The explosion took place in the Shiite-dominated village of Usterzai, raising speculation that it may have been a sectarian assault. The Hikmat Ali Hotel -- owned by a Shiite -- was among several buildings destroyed or badly damaged, police official Asmat Ullah said. At least eight cars were mangled by the force of the blast, witnesses said.

Sunni extremist groups such as the Taliban and al Qaeda believe Shiites are infidels, and their presence has fueled sectarian attacks that have long plagued Pakistan.

"When the clouds of dust cleared, I saw the dead bodies and the pieces of bodies all around, and everywhere there was blood and wounded people. They were crying," Wagar Ali, who was wounded in the blast, told AP Television News.

TV footage showed some of the wounded in hospital beds and on stretchers. The victims were bloodied, bandaged and seemingly in shock.

Vegetable seller Madad Ali, hurt in the explosion, said he saw the suicide bomber approaching.

"I was working when I saw a van come from the Kohat road. Inside was a man with a beard, and he blew himself up with a very powerful blast," said Ali. "The roof of the shop came in on me and I was stuck underneath. People started to dig us out from the rubble."

The violence underscored the relentless insecurity in Pakistan's northwestern region.

Pakistan has launched several offensives against extremist groups in the area over the past year, but attacks persist. The U.S. is particularly anxious for Pakistan to clamp down on insurgents it says are behind attacks on American and NATO troops across the border in Afghanistan.

No one claimed responsibility for Friday's attack in Kohat, a garrison town about 60 kilometres south of Peshawar, Pakistan's main northwestern city.

Kohat police official Ali Hasan Khan said four more bodies were retrieved from the rubble late Friday, raising the death toll to 29. Another 55 people were wounded and hospitalized, Khan said.

On Thursday, six people were wounded when a bomb planted outside a shop in Kohat's main bazaar exploded.

Despite Friday's attack, Pakistan's military has made gains in the region over the past year. A four-month-old army offensive against Taliban militants in the Swat Valley has -- according to the military -- killed more than 1,800 alleged militants, while at least three top leaders of the Swat Taliban have been arrested.

Suspected U.S. missile attacks have also played a significant role in neutralizing the insurgency, including the Aug. 5 CIA drone strike that killed Taliban chieftain Baitullah Mehsud.

Officials said Thursday they believed the al Qaeda operations chief for Pakistan and a top Uzbek militant were killed in missile attacks in the northwest earlier this month. A Pakistani patrol killed 10 Taliban attempting to infiltrate Swat Valley's main city of Mingora on Thursday.

Government officials say the army is also closing in on Swat Taliban chief Maulana Fazlullah, whose radio broadcasts long spread fear among residents of the valley.

Search and clearance operations over the previous 24 hours in Swat led to the arrests of seven militants and surrenders of another 13, the Pakistani military said Friday.