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By Alamgir Bitani
PESHAWAR, Pakistan (Reuters) - A suicide car-bomber killed four people on Monday near a Pakistan air force base close to the northwestern city of Peshawar and the Afghan border, a government official said.
The city has been targeted several times since the army began an offensive against the Taliban in South Waziristan last month and militants stepped up retaliatory attacks. Hundreds of people have been killed.
The attacker set off his bomb after being challenged at a checkpost near a police station about 2 km (1 mile) from the Badaber air base on the city's outskirts. The blast badly damaged the police station, a mosque and a shop.
"It was a suicide car-bomb attack. The mosque was worst damaged. The police station was also damaged," city administrator Sahibzada Anis told Reuters.
Four people were killed and 24 wounded, said Abdul Hameed Afridi, administrator at the Peshawar's main hospital.
The bomber was driving a small van of a type often used as a delivery vehicle and police opened fire on him when he refused to stop for a check, said Peshawar police chief Liaquat Ali Khan.
The van was coming from the direction of the Khyber ethic Pashtun tribal region where Taliban militants have been fighting security forces.
"We have beefed up checks at entry and exit points to and from the tribal areas and that's why these blasts are taking place at our checkposts and our men are laying down their lives," Khan told Reuters.
The army went on the offensive in South Waziristan on the Afghan border on October 17, aiming to root out Pakistani Taliban militants who stepped up their war on security forces in 2007.
The militants have responded with intensified attacks in towns and cities across the country.
The United States, weighing options as it struggles to stabilise Afghanistan, says Pakistani action against militants in border enclaves is vital for its Afghan effort.
The violence in recent weeks has rattled investors and the main stock index has lost more than 3 percent since the offensive began.
However, the market was 1.32 percent up at 9,186.94 at 0620 GMT, though volume was thin.
"Even though the market has opened on a positive note, volume is still on the low side which clearly shows investors are still worried," said Sajid Bhanji, a dealer at brokers' Arif Habib Ltd.
The market got a boost late last week after the International Monetary Fund said there were glimmers of recovery despite risks.
Separately, suspected Taliban gunmen shot dead a pro-government ethnic Pashtun tribal elder in the Bajaur region, north of Peshawar, a government official in the region said.
Militants have killed hundreds of pro-government tribal leaders over recent years.
In the Orakzai tribal region southwest of Peshawar, 16 militants were killed when jet fighters attacked them on Sunday, government officials said.
(Additional reporting by Zeeshan Haider and Izad Mohmand; Editing by Robert Birsel)

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