Internal security in nuclear-armed Pakistan, a country vital to the war against al Qaeda and other Islamist militant groups, has deteriorated at an alarming rate over the past two years.
The bombing bore the signs of an attack by al Qaeda or an affiliate, a U.S. intelligence official said.
It came hours after new President Asif Ali Zardari, widower of assassinated former prime minister Benazir Bhutto, made his first address to parliament a few hundred meters away, calling for terrorism to be rooted out.
The tightly guarded hotel, part of a U.S.-based chain and popular with foreigners, diplomats and rich Pakistanis, was engulfed in flames for hours after the blast.
Zardari made a televised address to the nation on Sunday and said the bombing was cowardly.
"This is an epidemic, a cancer in Pakistan which we will root out," he said. "We will not be afraid of these cowards."
Pakistan's army is in the midst of a major offensive against al Qaeda and Taliban fighters in the Bajaur region on the Afghan border, while the U.S. military has intensified attacks on militants on the Pakistani side of the border, infuriating many Pakistanis.
Militants have launched bomb attacks, most on security forces in the northwest, in retaliation for the strikes on them.
"They're giving a very clear, unambiguous message that if the government pursues these policies, this is what (they) will do in response," Talat Masood, a retired general and defense analyst, said of the attack.
"They are saying 'we can strike anywhere, at any time regardless of how good you think your security is'," he said.
An al Qaeda video, released to mark the seventh anniversary of the Sept 11, 2001, attacks in the United States, included a call for militants in Pakistan to step up their fight.
"You must stand with your Mujahideen brothers in Afghanistan and ... strike the interests of Crusader (Western) allies in Pakistan," Mustafa Abu al-Yazid, an al Qaeda commander in Afghanistan, said on the tape.
20-FOOT CRATER
Saturday's attack was the worst yet in the capital. It came six months after a civilian government took power and a month after it forced former army chief and firm U.S. ally Pervez Musharraf to step down as president.
A crater up to 20 feet deep was in the road in front of the gates of the hotel, which had been bombed twice before. The Interior Ministry said the bomb probably contained more than 500 kg (1,100 lb) of explosives.
Hospitals reported 43 dead and the Interior Ministry said 236 people were wounded. One foreigner was killed, an American, and 13 foreigners were wounded, police and hospital officials said.
The Danish Foreign Ministry said a Danish diplomat was missing and one was wounded. Up to six Saudi Arabians were missing, the Saudi ambassador said.
Flames and smoke poured out of the 290-room, city centre hotel. Dozens of cars were destroyed and windows shattered hundreds of meters (yards) away.
Soldiers cordoned off the area. The fire was put out after six hours and investigators and rescuers were going through the ruins.
A wounded hotel security official said a truck had been stopped at the hotel's security barrier and two small explosions had gone off minutes before the main blast.
The owner of the Marriott, one of two five-star hotels in the capital, said guards at the security gate had exchanged fire with the attacker before he set off the explosives.
Clemens Steinkanp, a German who was slightly wounded, said hotel security men had warned guests to move to the back of the building shortly before the bomb went off.
"Nothing happened for five minutes ... but then there was a huge blast," he said.
U.S. CONDEMNATION
Zardari is close to the United States and has vowed to maintain Pakistan's commitment to the U.S.-led campaign against violent militants, even though it is deeply unpopular.
The United States, Britain and the U.N. secretary general condemned the bombing.
"This attack is a reminder of the ongoing threat faced by Pakistan, the United States, and all those who stand against violent extremism," U.S. President George W. Bush said.
In his address to parliament, Zardari said Pakistan must stop militants from using its territory for attacks on other countries. He also said Pakistan would not tolerate infringement of its territory in the name of the fight against militancy.
Zardari, who won a presidential election this month, is due to leave for the United States on Sunday, and is scheduled to meet Bush in New York on Tuesday before the U.N. General Assembly.
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