The attack blamed on Kurdish militants took place on the eve of a rare visit by Prime Minister Ahmet Davutoglu, whose government has waged a relentless campaign against Kurdish rebels since last summer, to central Diyarbakir today.
Speaking to AFP, a regional security source said a remotely-operated car bomb went off yesterday as a police vehicle drove past the city's main bus terminal. Of the 27 wounded, 14 were civilians and 13 police.
"We cannot tolerate this any more. European countries and other countries, I hope they can see the true face of terrorists in these attacks," he said.
Erdogan has been infuriated in recent months by US backing of Kurdish militias in Syria which Ankara see as the Syrian branch of the PKK and has claimed some EU states tolerate the group on their territory.
He argued that the Kurdish rebels are as dangerous as the fighters of the Islamic State group, which has become the West's main target in Syria.
Ambulances rushed to the scene of the blast in Diyarbakir, where images showed the police bus reduced to a burnt-out wreck by the force of the explosion.
Meanwhile, all the windows from a nearby multi-storey building were blown out by the force of the blast, an AFP correspondent said.
Turkish forces have been engaged in an ongoing operation against rebels from the outlawed PKK in the region that has resulted in ferocious clashes and heavy casualties on both sides.
Erdogan said this week that 355 members of the security forces had been killed in the fighting, along with 5,359 members of the PKK. It was not possible to confirm the toll on the rebel side.
Over 40,000 people have been killed since the PKK took up arms in 1984 demanding a homeland for Turkey's biggest minority. Since then, the group has pared back its demands to focus on cultural rights and a measure of autonomy.
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