A bomb attack on a crowded grocery market in a Shia-dominated neighbourhood in Pakistan has left at least 65 people dead and more than 180 wounded.

Police said an unknown number of casualties were still trapped under rubble after the explosion in the ethnic Hazara area of the south-west city of Quetta.

The atrocity followed a suicide bomb attack at a snooker club in the city on 10 January which killed at least 91 people and wounded 121. That incident sparked protests that led to the ousting of the government in the surrounding province of Baluchistan, a volatile region which borders Iran and Afghanistan.

Outlawed Sunni militant group Lashkar-e-Jhangvi, which claimed responsibility for the January attack, was reported to have said it was behind the latest bombing.

Pakistan's minority Shia population has become a target for extremists who view them as heretics and proxies of Iran.

Prime Minister Raja Pervaiz Ashraf said the government was determined to fight "such dastardly acts" and bring the culprits to justice. The device, which was hidden in a water tanker, ripped through the town's main bazaar, a language school and a computer centre. At the time of the blast on Saturday afternoon dozens of people, mainly women, were shopping for the evening meal and children were leaving classes.

Police were investigating whether the bomb was fitted to a motorcycle before being detonated by remote control.

Quetta police chief Mir Zubai Mehmood said the explosives weighed up to 1,000kg – a larger amount than was used in January's attack. The blast brought down nearby buildings, with television footage showing fruit and vegetables from the market strewn across the ground next to the wreckage of street carts. Burned school bags and books were also among the debris.

"I saw many bodies of women and children," an eyewitness said. "At least a dozen people were burned to death by the blast."

Victims, including some in critical condition, were rushed to three different hospitals in the area while others were flown for treatment in the southern city of Karachi.

Angry crowds took to the streets in protest, blocking roads with burning tyres and throwing stones at passing vehicles.

Shots were fired into the air in an attempt to keep people away from the area in case there was a secondary explosion, a trick used by insurgents to kill people rushing to help after an attack.

The Hazaras, an ethnic group who migrated from Afghanistan more than 100 years ago, are angry at what they say is a lack of protection against attacks by Sunni militants.

"This evil force is operating with the patronage of certain elements in the province," said Qayum Changezi, the chairman of a local Hazara organization.

After the bomb attack in January residents refused to bury their dead until they received assurances of security from the government. Ashraf flew to the city, the capital of Baluchistan, to make promises of better protection and sacked the province's chief minister and his cabinet.

Baluchistan has been the setting for an insurgency by Baluch nationalist groups who want a greater share of income from gas and mineral resources, and has further been destabilised by the activities of Islamic militant groups.