"If you look on the Internet you'll see that most hotels have lowered their rates since Thursday" to try to lure travellers worried about security, said Haldun Guzin, manager of the Cihangir Hotel in the city centre.

On Thursday a bomb exploded on a crowded public bus in the city, apparently set off accidentally by the woman carrying it, killing four people and injuring some 15 others.

"Now tourists will wait a while to see if anything else happens," Guzin said Saturday, adding that Turkey's tourist industry was still recovering from a spate of deadly Istanbul bomb attacks in November that left more than 60 dead.

"After November we had about 20 percent cancellations, and that lasted right up until March," he said, adding however that he had so far had no cancellations after the latest explosion.

Istanbul's authorities had been hard at work cleaning up the bustling metropolis for weeks before Monday's NATO summit, renewing pavements, planting flowers and controversially rounding up prostitutes and street vendors.

Straddling the Bosphorus, the strait that separates Europe and Asia, its skyline studded with domes and minarets, Istanbul hosts many historic sites and along with Turkey's Mediterranean beaches is a major tourist destination.

But the city of more than 10 million people has also long been a playground for Al-Qaeda-linked Islamist militants, far-left guerrillas and armed Kurdish rebels.

It has been on edge since November when twin suicide bombings against two synagogues, the British consulate and a British bank claimed 63 lives and left hundreds more injured.

The carnage, the worst bomb attacks in the country's history, was blamed on local militants with links to Osama Bin laden's Al-Qaeda network.

In recent weeks, there have been a number of small bomb attacks in Istanbul and other Turkish cities, similar to those carried out in the past by left-wing militants.

And then came Thursday's blast, followed Saturday by a small bomb that exploded in the city without causing any injuries.

Turkey's Tourism Minister Erkan Mumcu put a brave face on it, insisting that the latest explosions would not have any serious impact on tourism.

"We will see a very good season. Terrorism can happen anywhere in the world," he told reporters Friday, pointing to the March 11 bomb attacks in Madrid and the September 11, 2001 attacks on New York and Washington.

"These things can happen and that's how people have started to see it."

But travel agents in Istanbul were less confident.

"We've had no cancellations but sales have dropped 20 percent since Thursday," said Selcuk Kurtoglu of Euro Marmora Tourism.

He said that his company, which deals largely with French tourists, was hit by a 50 percent downturn in bookings from France after the November attacks -- which came during the touristic low season -- that lasted right up until March.

Another major bomb attack now -- at the start of the high season -- would be disastrous for business, said Kurtoglu.

It would also distract the 3,000 delegates and some 3,500 reporters in town for the NATO summit from the city's attractions and leave them with what in the eyes of the tourist authorities would be the wrong type of memories.

WAR.WIRE