The attacker detonated his explosives as he drove by the main entrance to the Vladikavkaz market, according to the Emergency Situations Ministry.
At least 17 people, including the suicide bomber, were killed and 133 were wounded in the explosion, said Alexander Pogorely of the Emergency Situations Ministry's branch in southern Russia. He said 98 of the injured were hospitalized, many in grave condition.
Russian television stations showed a shrapnel-littered square in front of the market, with blood stains on the pavement and rows of vehicles scarred by the blast.
Russian President Dmitry Medvedev sent his regional envoy to Vladikavkaz to help coordinate efforts to help the victims. He urged the investigators to "do everything to track down the beasts, the scoundrels who conducted that terror attack."
No one has immediately claimed responsibility for the bombing, which was the deadliest such attack in the region since a double suicide bombing killed 12, mostly police officers, in the province of Dagestan in April. Twin suicide bombings on Moscow subway in March killed 40 people and wounded over 100.
The market and its surrounding blocks has been the target of several bomb attacks over the past dozen years, in which scores of people have died.
Vladikavkaz is the capital of the Russian republic of North Ossetia. Although it is less plagued by violence than some other republics in the region such as Chechnya and Dagestan, North Ossetia has experienced ethnic tensions and frequent attacks.
It was the scene of the 2004 Beslan crisis, in which Chechen militants took hundreds of hostages at a school 鈥� a siege that ended in a bloodbath killing more than 330 people, about half of them children.
The Vladikavkaz market was bombed in 1999, killing 55. Another bombing in 2001 killed six people. In 2004, 11 people died when a minibus stopped near the market was bombed.
Unlike most other Caucasus provinces where Muslims make up the majority of the population, North Ossetia is predominantly Orthodox Christian. It has been destabilized by long-simmering tensions between ethnic Ossetians and ethnic Ingush that exploded into an open fighting in 1992.
The regional president of Ingushetia, Yunus-Bek Yevkurov, quickly sent condolences to the leader of North Ossetia Thursday in an apparent bid to help assuage tensions between the two ethnic groups.
The market attack came as Muslims were preparing to celebrate Eid al-Fitr, a holiday marking the end of the holy month of Ramadan.
"The crimes like the one that was committed in the North Caucasus today are aimed at sowing enmity between our citizens," Prime Minister Vladimir Putin said in televised remarks during a meeting met with Russia's top Islamic cleric. "We mustn't allow this."
Russia's North Caucasus region has been gripped by violence stemming from two separatist wars in Chechnya and fueled by endemic poverty, rampant official corruption and police abuses.
In the Caspian Sea province of Dagestan, officials said Thursday that a hotel employee and another civilian were shot to death by men trying to build a bomb in their hotel room.
Republican Interior Ministry spokesman Vyacheslav Gasanov said the shooting took place late Wednesday in the capital Makhachkala. He said three armed men fled a room in the small hotel after an explosion and opened fire on a hotel clerk and another person who confronted them. He says police found several bombs and six grenades in the room.
In the Dagestani town of Khasavyurt, on the border with Chechnya, a policeman returning home from work was shot to death, Gasanov said.
