The explosion Saturday, caused by a bomb left in an unattended bag, was the first major terrorist attack in India since the 2008 Mumbai massacre.
It ripped open the German Bakery in the city of Pune, 125 miles (200 kilometers) southeast of Mumbai. Thick patches of blood and severed limbs littered the popular hangout, which is close to a meditation retreat and a Jewish center officials say were previously scouted by a terrorist suspect now detained in the U.S.
"I came running to the bakery after hearing the explosion. I found people lying all over the place," said Abba More, who lives nearby.
Security forces were put on high alert Sunday at airports, train stations and markets across the country.
Hindu nationalist leaders blamed the attack on Pakistan and demanded the government call off next week's peace talks, the first between the nuclear-armed neighbors since the Mumbai siege.
"India's initiative to hold peace talks with Pakistan is misconceived and adventurous," said Arun Jaitley, a top leader of the opposition Bharatiya Janata Party.
He said India shouldn't restart peace talks until Pakistan stops allowing terrorists to base themselves there and punishes those involved in the Mumbai attacks. "Terrorism and talks can't coexist," Jaitley said.
There was no immediate response from Pakistan's government to the claims.
Indian External Affairs Minister S.M. Krishna said he would wait for the forensic experts' report before commenting on the opposition demand.
Meanwhile, the Indian army accused Pakistani soldiers of unprovoked firing at Indian positions along the cease-fire line dividing Kashmir, the Himalayan territory claimed by both countries.
Pakistani troops fired automatic guns and rockets for nearly two hours on Saturday night in the Punch sector, said Lt. Col. Biplab Nath, an Indian army spokesman. He said Indian troops returned fire.
"We will lodge a protest with the Pakistan army," he told The Associated Press.
There was no immediate comment from Pakistan's army. The two sides often exchange gunfire in breach of a 2003 cease-fire accord.
Home Minister Palaniappan Chidambaram visited the bakery and the wounded in hospitals on Sunday. He told reporters investigators were trying to determine what explosives were used and how the bomb was triggered.
One foreigner was among the dead, but his nationality was not immediately known, Home Secretary G.K. Pillai said, adding that the three victims identified so far were Indians.
Pillai also said four Iranians, two Sudanese, one Taiwanese, one German and two Nepalese were among the wounded.
The blast occurred at 7:30 p.m. Saturday after one or two people posing as customers left behind a backpack containing a bomb, officials said.
"It appears that an unattended package was noticed in the bakery by one of the waiters who apparently attempted to open the package when the blast took place," Pillai told reporters.
The bakery is about 200 yards (200 meters) from the Osho Ashram, a renowned meditation center that Pillai said had been surveyed by David Headley, who is facing charges in Chicago for allegedly scouting targets for the Mumbai attack.
Chidambaram said Headley had also observed the Chabad Jewish center near the bakery.
"This particular area has been on the radar (of terrorists) for quite some time," Chidambaram said. "Police were sensitized that Chabad House was a target, so was the Osho Ashram."
The bombing was the first major terrorist strike in India since 10 Pakistan-based gunmen rampaged through hotels and a train station in the financial hub of Mumbai for 60 hours in November 2008, killing 166 people.
Recently, ties between India and Pakistan appeared to be warming. Talks scheduled for Feb. 25 in New Delhi would be their first formal negotiations since the Mumbai attacks.
