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Panaji: Two people were detained in Goa in connection with the blast in Margao late Friday night, which killed one and injured another.
Police claim to have averted another blast. A bag containing gelatin sticks was flung from a truck.
Those detained were picked up early Saturday morning. The police have not identified them so far.
Superintendent of Police Vishram Borkar said that in Sancoale, near the port town of Vasco, the other blast was averted when alert occupants of a truck flung a bag into a nearby field when they heard a clock ticking inside.
"The zipped bag contained a timer device and a few sticks of gelatine, which was diffused by our bomb disposal squad late in the night," Borkar said.
The truck was carrying nearly 40 people and was headed for a narakasura competition, where thousands of people were gathered to see several giant effigies being judged for prizes and then set on fire, as part of a popular Diwali tradition in Goa.
Meanwhile Goa Home Minister Ravi Naik confirmed links of the right wing Hindu organisation Sanatan Saunstha to Friday night's blast near Grace Church in Margao, 35 km from from Panaji.
Officials alleged that the scooter that was blown up by the blast had explosives belonging to Nishad Bakhale, a member of the Saunstha. Of the two men on the scooter, Malgondi Patil was killed and Yodesh Naik was injured.
The police said both were members of the Saunstha.
Patil succumbed to his injuries a few hours after the blast, while Naik is in critical condition and is being operated upon at the Goa Medical College, near Panaji.
Ravi Naik said police were searching the Saunstha's headquarters in the temple town of Ramnathi in the Ponda region of Goa.
A red alert has been sounded across the state.
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