The explosion happened at 11:40 p.m. (2140 GMT), according to a police spokesman.

The ensuing blaze threw body parts around the mangled remains of the car, believed to be a rented Ford Fiesta.

Police were working on the theort that the victims were ETA activists who had been handling a bomb or preparing a bomb.

Police found a pistol, remote control devices and car licence plates in the burnt out car.

Local government representative Enrique Villar rushed to the scene and said he was sure that the two people killed were members of ETA.

"There will be many people who sleep easier in their beds," he said.

Bilbao mayor Inaki Azkuna told a press conference that the two victims were members of an ETA commando unit.

In previous incidents over the last two years, five ETA activists have been killed manipulating or transporting explosives.

Spanish police on Monday arrested a suspected member of the armed ETA group, bringing to nine the number of arrests in a week, Interior Minister Angel Acebes said.

Jose Luis Kamiode, 53, was arrested in the Basque town of Hernani near San Sebastian, Acebes told reporters in Madrid.

Documents seized during the arrest last week in southern france of two suspected leaders of the separatist organisation, led police to his home.

Also on Monday, ETA activist Antonio Gabiola, arrested in southwest France in February 2001, was extradited to Spain to face trial in connection with a 1988 kidnapping and the 1985 assassination of Banco Central director Ricardo Tejero.

A total of nine people have been arrested since last Monday in a joint crackdown by French and Spanish police on suspected ETA activitists. Seven are currently in jail.

Two of the suspects, Felipe Goizueta Altamira and Virginia Jaca, arrested in Hernani last Thursday were freed on Monday for want of sufficient proof.

Suspected ETA military leader Juan Antonio Olarra Guridi and his female companion Ainhoa Mugica Goni, thought to be his second-in-command, were arrested in Bordeaux in southwest France last Thursday.

The pair were tranferred to appear before an anti-terrorist judge in Paris and face a raft of terrorism-related charges.

ETA has waged a deadly 30-year campaign of violence for an independent Basque homeland in northern Spain and parts of southwestern France.

gc/pvh

Nampa-AFP WEB story ENDS (NAMPA 240324)

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