Two men riding a motorbike left a milk container near the gate of the shrine in Pakpattan, 190 kilometres (120 miles) from the Punjab provincial capital Lahore, which then exploded in a huge fireball, a witness said.

"We have four killed and about 12 wounded," regional police chief Mohammad Kashif told reporters. "The rescue work is over. We're now investigating."

Sufi worshippers who follow a mystical strain of Islam have frequently been the target of bloody attacks by Islamist militants in Pakistan.

The blast blew up a boundary wall and damaged several shops and stalls outside the shrine where the 12th century saint, Baba Farid, also known as Ganjshakar is buried, witnesses said.

Police said the mausoleum of Baba Farid was undamaged, adding that the blast took place near the eastern gate which was already closed for security reasons.

The Pakpattan site is the second most popular after the Data Darbar shrine in the eastern city of Lahore, where two suicide bombers blew themselves up among crowds of worshippers in July, killing 42 people.

On October 7, two suicide bombers blew themselves up at a Sufi shrine of Abdullah Shah Ghazi in Karachi, Pakistan's biggest city, killing nine worshippers, including two children.

Militant Islamists see visits to Sufi shrines and some rituals as un-Islamic.

Bomb attacks in Pakistan killed 10 people last Friday, targeting a military patrol in the lawless tribal belt on the Afghan border and worshippers leaving a mosque in the main northwestern city of Peshawar.

Monday's attack came after Washington held out an offer of two billion dollars in fresh military aid to Pakistan, where it wants the military to do more to fight insurgents crossing into Afghanistan from the tribal belt.

Washington brands the area an Al-Qaeda headquarters, although there had been a relative lull in violence since Pakistan suffered catastrophic floods in late July that affected more than 20 million people.

More than 3,740 people have been killed in suicide attacks and bomb explosions, blamed on homegrown Taliban and other Islamist extremist networks, since government troops stormed a radical mosque in Islamabad three years ago.

Pakistan flatly denies US suggestions it is not doing enough to tackle Taliban and Al-Qaeda-linked militants who have carved out strongholds in the northwest and last year inched closer towards the capital Islamabad.

According to Pakistani military statistics, 2,421 army and paramilitary soldiers were killed and 7,195 wounded in fighting with Islamist militants from 2002 until April this year.

Secretary of State Hillary Clinton said Friday that the United States would offer two billion dollars in fresh military assistance to Pakistan, in a public show of support as it tries to strike a balance with its growing ties to India.

The United States has "no stronger partner when it comes to counter-terrorism," Clinton said at high-level talks in Washington.

Clinton said the military package, which is subject to Congressional approval, would come over several years and be in addition to 7.5 billion dollars in civilian aid the United States has committed over five years.

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