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Islamic State said the group carried out the bombing at Parsons Green underground station in west London on Friday, media reports said.
British Prime Minister Theresa May said Friday that the terror threat level is raised to critical, which means a further terrorist attack in Britain may be imminent.
May said that her government decided to raise the terror threat level from severe to critical, highest possible level, after an improvised explosive device (IED) explosion took place on a packed rush-hour carriage at Parsons Green subway station on Friday morning in London, Xinhua news agency reported.
The Islamic State's Amaq News Agency said on Friday night that the terrorist group claimed responsibility for the subway explosion in London, Sky news reported.
London police said on Friday that the home-made explosive device partially detonated in the morning rush-hour blast in a subway station in London.
The device had a timer, police added.
At least 29 people, including a young boy, were injured when the bomb sent a ball of fire on a packed carriage of a District Line train at Parsons Green subway station.
Nobody suffered life-threatening injuries in the incident, the fifth terrorist attack Britain has suffered in less than six months. They are being treated in hospitals mainly for burn injuries.
Condemning the "cowardly" terror attack, May said an improvised explosive device that exploded on a packed Tube train was intended to cause significant harm, according to Sky News.
A massive hunt for the perpetrator is under way, and London police called upon people to provide information that would help identify and arrest the man who placed the explosive device on the train.
According to previous local media reports, the identity of the suspect has been found with the help of surveillance footage.
The Friday blast came after three deadly terrorist attacks in London this year -- Westminster Bridge, London Bridge and Finsbury Park, and one in Manchester at a concert.