The Kurdistan Freedom Hawks (TAK), an offshoot of the outlawed Kurdistan Workers Party (PKK) militant group, says it carried out a suicide bombing in Istanbul on June 7 that killed 11 people.
A car bomb ripped through a police bus in central Istanbul during the morning peak hour on Tuesday near the main tourist district, a major university and the mayor's office.
The car was detonated as police buses passed, Istanbul Governor Vasip Sahin told reporters, in the fourth major bombing in Turkey's biggest city this year.
Security concerns were already hitting tourism and investor confidence. Wars in neighbouring Syria and Iraq have fostered a home-grown Islamic State network blamed for a series of suicide bombings, while militants from the largely Kurdish southeast have increasingly struck in cities further afield.
Turkish President Tayyip Erdogan visited the wounded in a nearby hospital.
The blast hit the Vezneciler district, near the city's historic heart. It shattered windows in shops and a mosque and scattered debris over nearby streets.
"There was a loud bang, we thought it was lightning but right at that second the windows of the shop came down. It was extremely scary," said Cevher, a shopkeeper. The blast was strong enough to topple all the goods from the shelves of his store.
The police bus that appeared to have borne the brunt of the explosion was tipped onto its roof on the side of the road. A second police bus was also damaged. The charred wreckage of several other vehicles lined the street.
Several witness reported hearing gunshots, although there was confusion as to whether attackers had opened fire or whether police officers had been trying to protect colleagues.
Turkey has suffered a spate of bombings this year, including two suicide attacks in tourist areas of Istanbul blamed on Islamic State, and two car bombings in the capital, Ankara, which were claimed by a Kurdish militant group.
That has hit tourism in a nation whose Aegean and Mediterranean beaches usually lure droves of European and Russian holidaymakers in the summer. Russians stopped coming after Turkey shot down a Russian warplane over Syria last November.
The number of foreign visitors to Turkey fell by 28 percent in April, the biggest drop in 17 years.
"Business hasn't been very good anyway. We're now expecting fast check-outs and we think it will get worse," said Kerem Tataroglu, general manager of the Zurich Hotel, less than 300m from where Tuesday's blast happened.
Reuters / AAP