Although the police will not admit it, Hyderabad has become a terror target.

Andhra Pradesh Chief Minister Dr Y S Rajashekhar Reddy believes the terrorists are unable to digest the city's growth and hence think by attacking it, they can cause a dent in Hyderabad's economy.

The Andhra Pradesh police will give you the same line and say that the city has grown ten-fold in the last couple of years and hence it is being targeted by the terrorists.

Intelligence Bureau sources feel the terrorists want to create communal tension in the city, which has a large Hindu and Muslim population.

In the aftermath of such attacks, they say if Hyderabad witnesses communal riots, then the city will not stand united and that would also weaken the state administration.

Some Hyderabad residents believe the intention behind such attacks is to liberate the city from 'Hindu rule', a demand which has existed since 1948 when the Nizam of Hyderabad acceded to India after Sardar Vallabhbhai Patel initiated police action.

In 2000, a Lashkar-e-Tayiba leader proclaimed that his organisation had in place a campaign to 'liberate' Hyderabad, and that the city would be 'won back through the sword'.

This issue goes back to 1948 when Kasim Rizvi, an Islamist who opposed India's takeover of Hyderabad, promised to fly the Nizam's flag over the city again.

IB records reveal that the Lashkar has been building up a network in Hyderabad. A senior police officer said the proclamation of bringing back the Nizam's rule is only an excuse. The real intent is to set up a full-fledged terror base in Hyderabad.

"The Muslim population in Hyderabad is very large and these outfits think they can garner support from them. By setting up a base in Hyderabad, these outfits believe they could also penetrate the rest of the country," the officer adds.

The Lashkar, which has evinced keen interest in Hyderabad, works closely with the Harkat-ul-Jehadi Islami in Bangladesh.

It handpicked Shahid, a resident of Hyderabad who is suspected to be the mastermind behind the blasts, to carry out operations in south India as he knew the terrain well.

The police say these outfits proclaim to the Muslim community that they will protect their life and property, and the honour of their women. Declaring that Islamic supremacy is their goal, these outfits say that none of this can be achieved if they were not liberated from 'Hindu rule'.

Although there are few takers for this hardline polemic among older Muslims, police officers say there is always the fear of the youth being attracted to such slogans.

So far, the police officers add, these outfits have failed in their efforts to drive a wedge between the Hindu and Muslim communities and are hence targeting Muslims through such attacks.

By doing so they expect Muslims to believe acts of terror like the one in May at Hyderabad's Mecca Masjid are conducted by Hindu fundamentalist groups, as a result of which communal tension in the city will be unleashed.

Terrorist outfits may also feel that acts of terror will scare away investors from booming Hyderabad. Chief Minister Reddy feels the city's growth is the only reason for Hyderabad being targeted by terrorists.