Pakistani police are hunting for gunmen who mounted the attack on Sri Lanka's cricket team in Lahore as government ministers attempted to figure out who was behind it.
The attack which killed eight people, six of them Pakistani policemen, plunged Pakistan into a "state of war", Rehman Malik, the prime minister's interior adviser, said.
"Be patient, we will flush all these terrorists out of the country," he added.
Six members of the Sri Lankan team and a British coach were wounded in the daylight attack as their bus approached the cricket stadium. None was so seriously hurt they had to be left behind when the squad departed for Colombo tonight.
Pakistan is unlikely to host international cricket in the immediate future following today's terror attack
on the Sri Lankan team in Lahore, the International Cricket Council's (ICC) chief executive Haroon Lorgat said today. The ICC is the sport's world governing body.
"It's difficult to see international cricket being played in Pakistan for the foreseeable future," Mr Lorgat told a news conference at Lord's.
A dozen gunmen attacked the team today with rifles, grenades and rockets. The attackers fired AK-47s and rockets and hurled grenades at Sri Lanka's team bus as it was being driven to Lahore's Gaddafi stadium for the third day of a match against Pakistan.
Team captain Mahela Jayawardene said the gunmen first shot at the tyres then at the bus itself. "We all dived to the floor to take cover," he said by telephone from the stadium, before being evacuated by helicopter along with the rest of the team, including all the wounded.
The bus driver was hailed as hero for steering the bus to safety as gunmen sprayed it with bullets from all sides.
"I was turning the bus towards the stadium near the main roundabout when I saw a rocket fired at us... it missed us and hit an electric pole, after which all hell broke loose," driver Mehar Mohammad Khalil said. The driver of a bus following behind, carrying the Australian umpires, was killed.
Sri Lankan cricket manager Brendan Kurrupu rejected suggestions that they made an error in judgement by agreeing to tour Pakistan.
"It was not a mistake to come and play in Pakistan. What happened today is tragic but we have to deal with it," Mr Kurrupu told reporters.
Two days ago Mr Kurrupu expressed satisfaction with the security being provided to the Sri Lanka team by the Pakistan authorities.
Bomb and gun attacks, mostly carried out by Islamist militants linked to the Taliban or al-Qaeda, have become commonplace in Pakistan over the past few years because of the government's support for the United States.
Today's incident had echoes of an attack on the Indian city of Mumbai last November in which around 170 people were killed and which led to the Indian cricket team cancelling its planned tour of Pakistan. The Sri Lankan team accepted an invitation to replace the Indians.
India blamed the Mumbai attack on Pakistan-trained militants and the incident brought international pressure on Pakistan to crack down on jihadi groups that its security agencies have been friendly with in the past.
The group blamed by India for Mumbai, Lashkar-e-Taiba, came from Pakistan's Punjab province, whose capital is Lahore.
"One thing I want to say, it's the same pattern, the same terrorists who attacked Mumbai," said Punjab Governor Salman Taseer.
A Pakistani minister accused India of being behind the attack. "The evidence which we have got shows that these terrorists entered from across the border from India," Sardar Nabil Ahmed Gabol, minister of state for shipping, told Geo television. "This was a conspiracy to defame Pakistan internationally."
Witnesses saw gunmen with rifles and backpacks running through the streets and firing on people and vehicles around the massive stadium in the morning attack. Television footage showed some of the attackers, who looked to be in their late teens.
The Punjab governor told reporters the assailants had been had been chased into a nearby commercial and shopping area. Police were searching buildings and stopping cars in a massive security sweep, but had lost track of the men..
It was the first major attack on an international sporting team since Palestinian militants attacked Israeli athletes at the 1972 Olympics in Munich.
The attack highlights Pakistan's seeming inability to defeat militancy spreading inside and outside the country and comes at a time when the United States is putting pressure on the government to do more to fight the Taliban and al-Qaeda.
US President Barack Obama said he was "deeply concerned" about the attack.
Pakistan's civilian government has lurched into political crisis less than a year since ex-army chief Pervez Musharraf was forced to quit as president, and the country is braced for street agitation by opposition parties in coming days.
The Karachi stock Exchange benchmark 100-share index fell 1.5 per cent, while the rupee lost 0.4 per cent against the dollar.
A spokesman for the Sri Lanka High Commission in Islamabad said six players were wounded along with assistant coach Paul Farbrace, a Briton. Most of them were hit by shrapnel.
Star batsman Thilan Samaraweera seemed to be the worst hit, suffering a thigh injury. The other Sri Lankan player admitted to hospital was Tharanga Paranavithana. Sri Lanka immediately cancelled the rest of the tour.
Pakistani president Asif Ali Zardari condemned the attacks, as Sri Lankan president Mahinda Rajapaksa said he was cutting short a trip to Nepal to return home.
Until this series Pakistan had gone without test cricket for more then a year because of security concerns. In 2002, a bomb exploded in Karachi while the New Zealand cricket team was touring, killing 13 people, including 11 French navy experts.