Tripoli, Lebanon - Fear engulfed Lebanon's second-largest city, Tripoli, after a deadly blast ripped through a bus carrying civilians and soldiers on Wednesday.

At least 17 people were killed, among them 10 soldiers, and 40 were wounded.

Several hours after the blast, the banking street in the northern port city looked like a battlefield, swarming with soldiers and military intelligence officials.

The area had been cordoned off by the army and investigators were still gathering the victims' remains on the streets.

The bus, which was targeted by the bomb placed on the sidewalk, was covered with ripped clothing, blood and shrapnel. The vehicle was destroyed and blood stains covered most of its seats.

The explosion, which was heard across Tripoli in the early morning rush hour, left scars in the hearts of inhabitants of the mainly Sunni-Muslim city.

"I am afraid of what will happen next," said Tripoli resident Maha Kabbra.

"The dark fingers are still hovering over our city and want to destroy the co-existence in this peaceful city," said Fadi Darwish.

Tripoli has made headlines in recent weeks as the scene of sectarian clashes that have killed and wounded dozens.

Sunni fighters loyal to the Western-backed government of Premier Fouad Seniora have clashed with followers of the Alawite sect - an offshoot of Shia Islam, the religious grouping of Syrian President Bashar Assad.

"The instability is making everybody in Tripoli live in constant fear of the unknown," Mohammed Karameh said.

The blast, for which no group immediately claimed responsibility, and the latest violence come at an especially sensitive time for Lebanon.

On Tuesday, after weeks of negotiation and five days of heated debate, the parliament approved a national unity government that will give Lebanon's Iranian and Syrian-backed Hezbollah opposition more say in the running of the country.

The blast also comes as Lebanese President Michel Suleiman prepares for a landmark visit to neighbouring Syria, which has been accused of repeated interference in Lebanon's internal affairs and the 2005 assassination of former premier Rafik Hariri.

Suleiman on Wednesday condemned the bombing, describing it in a statement as a terrorist attack: "The army and security forces will not yield to attempts to terrorise them with attacks and crimes."

Suleiman was Lebanon's army chief before he was elected president earlier this year. In May 2007, he was in charge of army operations during the 15 weeks of fighting between troops and the Sunni Muslim extremist Fatah al-Islam group.

It took months for the army to quell the so-called Fatah al-Islam uprising that saw fighting concentrated in and around the Nahr al- Bared Palestinian refugee camp just north of Tripoli.

Fighting was con, who are believed to be linked al-Qaeda, in the Nahr al-Bared Palestinian refugee camp, just north of Tripoli.

It took months for the Lebanese army to quell the so-called Fatah al-Islam uprising in which hundreds were killed and teh camp was virtually destroyed. It remains unclear, however, whether the extremists were entirely eliminated.

The Tripoli blasts sounded an alarm for most residents of the possibility that their city is at the mercy of what they call "sleeping terrorist cells."

"The government must work hard to free us from the hands of those terrorists that have no mercy," said Nadia Karameh.