At least 45 people were killed on Sunday when a suicide bomber blew himself up near the Pakistani-Indian border, police said, just after a daily ceremony when troops from both sides simultaneously lower the two nations' flags.
The Pakistani Taliban claimed responsibility for the attack, saying it was a response to the Pakistani army's actions against their positions in tribal areas straddling Pakistan's border with Afghanistan.
The suicide bombing took place in a car park on the Pakistani side at least 500 meters from the border with India. No Indian troops were hurt in the attack.
"I was sitting in my office near the border when I heard the blast. I rushed to the scene and saw scattered bodies, injured men, women and children and smashed cars," a Pakistani intelligence source told Reuters.
Pakistani police said they were investigating the attack and a doctor said up to 70 people had been wounded.
"The death toll increased to 45," the provincial police chief in the Pakistani city of Lahore told Reuters.
Hundreds of people visit the Wagah border crossing near the Pakistani city of Lahore every day to witness the flags of both countries being lowered just before sunset.
India and Pakistan have fought three wars and remain locked in a bitter conflict over the region of Kashmir, which both sides claim.
India accuses Pakistan of sponsoring jihadist groups in the region and encouraging them to make inroads into Indian territory to stage attacks against Indian forces, a charge Pakistan denies.
But the Taliban claim of responsibility suggested the suicide bombing had nothing to do with India.
"We claim the Lahore suicide attack," said a senior Pakistan Taliban commander, Gilamn Mehsud.
Ashok Kumar, inspector general of India's Border Security Force guarding Wagah, said the blast had taken place at around 6:15pm local time.
"Our side is safe. We are alert, have increased our security, we are in constant touch with district officials and state police," he said.
Any explosion on the India-Pakistan border is far more serious than a similar event on the Pakistan-Afghan border, another Indian security official said. He said there had not been any major attack in Pakistani Punjab in recent months.