Mumbai, July 13 (IANS) Hundreds of suspects were detained in and around Mumbai as investigators relentlessly hunted for terrorists who bombed the city's trains two days ago killing almost 200 people in India's financial capital.

Police officers said they strongly suspected the involvement of members of the outlawed Students Islamic Movement of India (SIMI) along with the Pakistan-based Lashkar-e-Taiba (LeT) group that is being widely blamed for the carnage.

But SIMI, an indigenous group with alleged dubious links worldwide, vehemently denied that it had anything to do with the outrageous seven serial bombings that ripped through train carriages or railway stations.

A SIMI spokesman told reporters: "SIMI is being unnecessarily dragged into the incident. We have no hand in the blasts and we strongly condemn the blasts."

But Mumbai Police sources said they thought otherwise. Confirming that hundreds had been detained for questioning, investigators of the Anti Terrorism Squad (ATS), tasked with probing the terror attacks, said they had begun to gather evidence.

Investigation so far, they said, revealed that newly set up terror module had helped LeT to carry out the deadly bombings, the worst in Mumbai since the 1993 serial bomb attacks that killed some 270 people.

Investigators said the module might have been made up of "sleepers" with no previous criminal records.

"Interrogation of several suspected SIMI activists has revealed that LeT has set up a new terror module in Mumbai comprising of sleepers who have no criminal records," said a senior ATS officer.

"SIMI activists had provided logistic support to LeT during the 2002 blasts, and the possibility cannot be ruled out that they may have assisted LeT this time too," the officer told IANS.

"Though ATS is shortlisting suspected SIMI activists in Mumbai, it will focus on both who have past criminal records and those who don't.

"We are also probing the activities of known SIMI sympathisers and those known to be covertly helping SIMI.

"Search and combing operations were carried out in hotels, railway stations and lodges across the city and several parts of Maharashtra though Wednesday night and Thursday. Several people have been detained for questioning," said ATS chief and Mumbai Police Joint Commissioner Krish Pal Raghuvanshi.

"The search and combing operations are being carried jointly by the Mumbai Crime Branch and ATS units," he added.

"Those detained include several suspected activists of SIMI who were picked up from their homes. Nobody has been formally arrested or charged," Raghuvanshi said.

"It seems a new group is involved in this case and we are treating it as a challenge."

The ATS is waiting for forensic reports to know the exact nature of the explosives used in the Tuesday blasts.