Turkish Interior Minister Efkan Ala said Sunday that the Islamic State extremist group was behind the suicide bombing in Istanbul that killed four people.

Ala identified the bomber as Turkish national Mehmet Ozturk, born in 1992 in Gaziantep in southern Turkey, which is near the border with Syria.

Five arrests have been made in connection with the attack, the minister said.

The identification was based on DNA tests, using a blood sample from a family member, state news agency Anadolu reported.

Islamic State has so far not claimed responsibility for the attack.

In January, 12 tourists were killed by a suicide bomber in Istanbul in an attack the authorities blamed on Islamic State.

The largest terrorist attack in the country's history was in October, when 100 people were killed in a series of bombings in Ankara also blamed on Islamic State.

Five people, including the bomber, were killed in Saturday's attack on Istanbul's main shopping street popular with locals and tourists, leaving Turkey reeling from the second such attack within a week.

Three of the dead were Israelis, of who two held dual Israeli-US citizenship, while a fourth fatality was reportedly an Iranian national.

At least 39 people were wounded in the explosion near a shopping area on Istiklal boulevard, a busy thoroughfare in the centre of Istanbul just off Taksim Square.

Among the injured in the blast in Turkey's largest city and economic hub were 24 foreigners, the local government's office said.

The Israeli Foreign Ministry said that the bodies of the three Israelis were flown home, along with five wounded Israelis, including several listed in severe condition. Five other wounded Israelis had landed in Tel Aviv earlier.

Israel's National Security Council, meanwhile, updated its travel warning for Turkey to level three, which means there is a "concrete, basic threat."

Israeli Prime Minister Benjamin Netanyahu condemned the bombing but said it was still not clear whether the Israeli group had been deliberately targeted.

"Terrorism is sowing death and destruction around the world. Israel is standing at the forefront of the struggle against world terrorism," he told his cabinet in Jerusalem on Sunday.

"Murdering innocent civilians has no justification anywhere - not in Istanbul, not in the Ivory Coast and not in Jerusalem."

Turkish Prime Minister Ahmet Davutoglu sent condolences to Netanyahu on Saturday night, saying that "today's attack in Istanbul has shown us once again that the international community as a whole should act in a resolute manner against the ignoble objectives of terrorist organizations."

The German embassy school in Istanbul was to remain closed on Monday, according to a letter from the school administration. The school is located near Istiklal street where the bombing took place.

German diplomatic missions and schools were closed last week in Istanbul and Ankara following what was described as a "concrete" terrorism threat, apparently from the Islamic State extremist group.

The Istanbul attack came as the country has already been on edge following a massive car bombing in Ankara on March 13 that killed 37 people.

That attack was claimed by the Kurdistan Freedom Falcons (TAK), a splinter group of the banned Kurdistan Workers' Party (PKK).

A similar attack last month in the capital left 30 dead and was also claimed by TAK.

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