On a day when Delhi was rocked by a powerful blast, Prime Minister Manmohan Singh voiced concern over forces of extremism and terrorism, saying they "threaten our state systems and impede our progress."

Articulating his views on the issue at a gathering of intellectuals in Dhaka University, Singh said "both India and Bangladesh are vulnerable to the forces of extremism and terrorism."

"Such forces sap the strength of our societies, threaten our state systems and impede our progress," he said.

"It is, therefore, of paramount importance that we work together to confront this challenge," Singh said.

Later in a statement to the Indian journalists accompanying him on his two-day visit here, the Prime Minister denounced the blast outside the Delhi High Court as a "cowardly act of terrorist nature."

"I just heard the sad news from Delhi about the bomb blast. I am told that 10 people have been killed. This is cowardly act of terrorist nature. We will deal with it. We will never succumb to the pressure of terrorism," Singh said.

He said "this is a long war in which all political parties, all the people of India have to stand united so that the scourge of terrorism is crushed".

Choosing to cement bilateral ties through the trade route, the Prime Minister said 46 Bangladeshi textile products would be allowed in Indian market without any restriction on the quantity.

"Yesterday, the government of India issued a notification removing all 46 textile tariff lines of greatest sensitivity to Bangladesh from the negative list for Least Developed Countries under South Asian Free Trade Arrangement (SAFTA). There will be no quota restrictions on these items," Singh said.

He said what was of greater long-term importance is increased Indian investment in Bangladesh, which will not only lead to greater economic activity but also increase Bangladeshi exports to India and other countries.

"We should work on both fronts not only to reduce the trade deficit but increase and even multiply total trade," he said.

Singh said concern has been expressed from time to time on the Tipaimukh dam project in India but "I wish to make it clear that India will not take and I repeat India will not take steps that will adversely affect Bangladesh."

Intelligence shared with Delhi Police in July: Home Minister

With terror striking the capital again, home minister P Chidambaram on Wednesday said intelligence about threats were shared with Delhi Police in July but contended that it would not be possible at this stage to identify the group that caused the bomb blast at high court.

Making a statement in the Lok Sabha on the blast, he regretted that the "tragic incident" had taken place despite Delhi Police being on high alert and capacity being built to strengthen the force in the last few years.

Informing members that the case will be handed over to the National Investigative Agency (NIA), Chidambaram said government will not be intimidated by terrorist groups and was "determined to track down the perpetrators of this horrific crime and bring them to justice."

He noted that Delhi is a target of terrorist groups and when parliament is in session and during certain other times of the year, the capital is placed on high alert.

"Intelligence agencies constantly share intelligence inputs with Delhi Police. Intelligence pertaining to threats emanating from certain groups was shared with Delhi Police in July, 2011," home minister said.

"At this stage, it is not possible to identify the group that caused the bomb blast today," he said about the terror strike which was the second incident at the high court in over three months.

Observing that the objective of terrorist groups was to strike fear and to destabilise the country, Chidambaram said, "We are clear in our mind that there is no cause that will justify terrorist acts. Government unequivocally condemns the terrorist attack that took place today."

Making the statement with "profound sorrow and regret", the Home Minister appealed to the House and the country that "We must remain resolute and united" at this point of time.

"We must not show any vacillation. We shall never be intimidated by terrorist groups. We are determined to track down the perpetrators of this horrific crime and bring them to justice," he said.

"On behalf of the government, I offer my sincere condolences to the families of those who lost their lives. I offer my sympathies to those who have been injured," he said, assuring the House that the government would extend the best medical treatment to the injured.

Giving details of the incident, he said the high intensity blast occurred at 10.14 AM just outside the reception centre of the High Court between gate no. 4 and gate no. 5.

"It is suspected that the bomb was placed in a briefcase," Chidambaram said, adding teams from Central Forensic Sciences Laboratory (CFSL), NIA and NSG rushed to the spot.

"A post blast investigation team of the Delhi Police is also carrying out investigations," he said.

The scene of the incident was cordoned off immediately and ambulances reached the scene and removed the injured within 20 minutes, he added.

Compensation to the blast victims

Delhi Government on Wednesday announced a compensation of Rs 4 lakh to the next of the kin of those killed in the blast outside the Delhi High Court while those permanently incapacitated will get Rs 2 lakh.

Those seriously injured in the blast will get Rs one lakh while in case of any death of minor, the family will get Rs 1.5 lakh. People who received minor injuries in the blast will be given Rs 10,000.

The compensation was announced after Chief Minister Sheila Dikshit visited the injured at the RML hospital. Eleven person were reported dead and over 50 injured in the blast.

Terming the incident as "very tragic", Dikshit said Delhi Government will provide all possible support to victims of the blast.

"It is a very unfortunate incident. It is a very tragic incident. So many people were killed and injured," she said.

Asked whether Delhi Police should be blamed for the blast, she said the probe ordered by Home Minister P Chidambaram will look into all aspects.

She directed the hospital administration to provide "best treatment" to the injured.

"People are being treated here. They are naturally under shock and I met them and their relatives. Nine people who were killed and 42 injured have been brought to RML Hospital.

Doctors are attending on the injured. Every possible attention is being given to the injured," Dikshit told reporters.

Dikshit also directed the health department to provide best medical care to all those admitted in Safdurjung and other hospitals.