A car bomb targeting soldiers killed five people and wounded 68 others - including 30 soldiers - Thursday in the Kurdish-dominated southeastern city of Diyarbakir, officials said. A bus transporting troops was passing by a five-star hotel when suspected Kurdish rebels detonated a remote-controlled car bomb, authorities said. Two high school students who emerged from a building where they were taking preparatory courses for university exams and three other civilians were killed. "A bomb left in a car ... was set off with a remote control. It was a very strong one. It was targeting a military service bus," Gov. Huseyin Avni Mutlu said. Mutlu said 30 soldiers were among the injured, private Dogan news agency reported. Several people could be seen lying unconscious amid burning cars, and a bus was engulfed in flames, reports said. Six cars were damaged in the explosion. Some students also were injured by flying glass. Authorities blamed the blast on Kurdish rebels. Police said two suspects reportedly escaped the scene. Authorities denied earlier news reports that the suspects were captured. The attack - which shattered the windows of surrounding buildings and could be heard 3 kilometers away - appeared to be retaliation for three air strikes by Turkish warplanes against Kurdish rebel shelters in northern Iraq last month. There have been two explosions in Turkey's commercial center, Istanbul, over the past two weeks, killing one and injuring nine. No one has claimed responsibility for the attacks but Istanbul Gov. Muammer Guler blamed Kurdish rebels. Rebels from the Kurdistan Workers Party, or PKK, have battled for autonomy in southeastern Turkey for more than two decades - a campaign that has resulted in tens of thousands of deaths. The group uses strongholds in northern Iraq for cross-border strikes. In October, Parliament authorized Turkey's military to strike back at rebels across the border. Turkish warplanes took off from an air base in Diyarbakir just minutes after Thursday's attack, pro-Kurdish Firat news agency reported on its Web site. It was not clear if the jets were on a bombing mission. Turkish military claimed it has killed up to 175 rebels in the first air assault alone on Dec. 16, a figure denied by the PKK. Turkey has carried out the strikes largely based on military intelligence provided by the United States. "Today's bombing in Diyarbakir is a horrific example of the senseless tragedy that terrorism brings," the US Embassy in Ankara said in a statement. "We strongly condemn this violence and reiterate our determination to stand together with Turkey in combating terrorism in all its forms." Firat reported that PKK leaders in Iraq earlier declared big cities in Turkey targets for rebels living in the country. "Unfortunately, terrorism showed its bloody face once more in Diyarbakir," Prime Minister Recep Tayyip Erdogan said. "Such events will not disrupt our determination against terrorism. Our struggle both on international and national levels will continue with the same determination."