Indian Home Minister P. Chidambaram says Monday evening's car blast was targeted at an Israeli diplomat's wife.
"It's quite clear that a very well-trained person has committed this attack," he said. "One has to proceed on the basis that it was a terrorist attack."
The attack was carried out in one of New Delhi's most secure districts -- only a few blocks from the residence of the prime minister himself.
"It appears that a motorcycle rider, a single person, came from behind and the person attached a device to the trunk's door of the Innova," he explained. "The explosion, according to the eyewitness...happened within seconds. And, we think it happened within about four to five seconds of the device being attached."
Police are carefully scrutinizing forensic evidence and closed circuit television footage from the vicinity of the explosion. Israeli intelligence is cooperating in the investigation. The Israeli diplomat's wife is described as in critical but stable condition and is recovering from shrapnel wounds and spinal injury.
Israel is openly blaming Iran for the attack. Iran denies involvement. And the official Iranian media quote a Foreign Ministry spokesman who accuses Israel of attacking its own embassies as part of a “psychological war” to tarnish relations against Iran.
Indian Home Minister Chidambaram was careful not to assign blame Monday, saying it is too early in the investigation.
"At the moment, I am not pointing a finger at any particular group or any particular organization. But whoever did it, we condemn it in the strongest terms," he said.
Separately, police in the former Soviet republic of Georgia defused a car bomb in an Israeli embassy vehicle, raising questions about whether the two attacks are connected.
There are apparent similarities between Monday's magnet bomb strike and attacks on Iranian nuclear scientists for which Iran blames Israel. Many Indians are now wondering whether their country will become a new front for a covert conflict between Israel and Iran because of the latter's nuclear program.
India has strong historical ties to Iran and depends heavily on it for imported fuel. India has resisted calls from Western nations to sanction the country for its nuclear program and is planning to send a massive trade delegation to Tehran later this month.
Western powers accuse Iran of trying to develop nuclear weapons under cover of a civilian energy program, a charge Tehran denies.