"There is no doubt that this is a terror attack," Gov. Muammer Guler told reporters. "The fact that there was a crowd in the area has increased the number of casualties," he added.
The governor said police were investigating who was behind the blasts.
CNN-Turk television, citing security sources, said police suspect Kurdish rebels may be responsible for the attack. It said intelligence reports had suggested the rebels were planning a bombing campaign in Turkish cities.
However, officials did not accuse any specific group. "We know it is a terrorist attack, but which organization is responsible -- we don't yet have that information," Deputy Prime Minister Hayati Yazici told journalists at the scene of the attacks.
Kurdish, leftist and Islamic militants are active in Istanbul and have carried out past bombings in the city. On July 9, gunmen believed to be inspired by al-Qaida opened fire on police guarding the U.S. consulate in Istanbul, killing three officers. Three attackers also died in a shootout with police.
Both of Sunday's blasts were in a square closed to traffic where people congregate at night.
An Associated Press reporter who arrived to the scene shortly after the explosions saw at least 12 people lying on the ground. Broken glass, clothing, shop mannequins and other debris were strewn on the ground and bomb squads in white overalls were inspecting the scene.
"The first explosion was in a telephone booth," said Huseyin Senturk, who owns a shoe shop in the area. "The second explosion was some 40 meters (yards) away."
"The first explosion was not very strong, Senturk added. "Several people came to see what was going on. That's when the second explosion occurred and it injured many onlookers."
The second explosion could be heard a mile away.
Guler said the bombs were placed in trash cans.
Nurettin Kapucu, a doctor at a nearby hospital, said some 25 people were being treated there and three of them were in serious condition. Yazici, the deputy prime minister, said 15 of the injured were in critical condition.
Kurdish rebels belonging to the Kurdistan Workers' Party, or PKK, have been fighting for self-rule in southeastern Turkey since 1984. The violence has killed tens of thousands of people since then.
Turkey has conducted frequent air raids on suspected rebel positions in northern Iraq, including one earlier Sunday. Earlier this year, it launched a weeklong ground offensive against the rebels.
Although most of the fighting in concentrated in rural areas of southeastern Turkey, the rebels occasionally launch bombing campaigns in Turkish cities and tourist resorts.
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