The bloodbath jolted this gas- and oil-rich U.S. ally in North Africa where Islamist violence is on the rise.
Witnesses said the blast in the town of Les Issers, some 35 miles east of Algiers, dug a 3-feet deep crater in the road, ripped off parts of the police academy's roof, and damaged much of its facade and nearby buildings.
No group has yet claimed responsibility, but the country's al Qaeda affiliate has said it was behind a series of bombings in the past two years.
A security official at the school told The Associated Press that the attack occurred as young applicants were lining up to register at the local police academy.
The attacker drove into the middle of the packed waiting line and set off the explosives, the official said on condition of anonymity because he was not authorized to discuss the matter with the media.
Bodies covered with multicolored blankets lay strewn on the ground, amid rubble. The carcass of a charred car lay on its side, its doors blown outward. A heap of singed clothes lay on a curb.
Witnesses said all roads within two miles of Les Issers were blocked and cell phone networks were scrambled as police closed off the area. Soldiers strung tarps across the front of the building to shield the carnage from onlookers, and vice versa.
Mohammed, a shopkeeper in Les Issers, said he was woken up by the blast. "It made a huge noise, my windows shook," he said, speaking on condition of anonymity because Algerians are often wary of foreign media attention.
Another witness who arrived on the scene at the same time as rescuers said the area was "a nightmare."
There were bodies scattered all over the road, some corpses were completely charred, you couldn't even recognize their faces," he said, requesting anonymity for the same reasons.
He said that several victims were people driving by in their cars and that their bodies were "meshed into their vehicles" by the blast.
Television footage showed Interior Minister Yazid Zerhouni visiting the scene of the blast. Zerhouni vowed to take whatever measures necessary against those responsible.
Violence has dramatically increased in Algeria since 2006, when the country's last big extremist group left over from an insurgency in the 1990s, known by the French acronym GSPC, re-branded itself as Al Qaeda in Islamic North Africa and joined the terrorist organization.
The bombing Tuesday was the deadliest yet of the new group's attacks, according to official death toll figures.
Some attacks have struck foreigners, while most have targeted the Algerian military and national security services, which are controlled by secular-leaning generals.
"Today's bombing is very symbolic, a pillar of the regime has been hit," said Khadija Mohsen-Finan, head of the North Africa program at the French think-tank IFRI.
"I don't recall anything as big since the decade of the civil war," she said, referring to the 1990s.
Algeria's insurgency broke out in 1992, when the army canceled the second round of legislative elections an Islamist party was slated to win. The ensuing face-off between Islamist fighters and security forces claimed up to 200,000 lives, with massacres blamed on both sides.
Mohsen-Finan said militants were now careful to avoid hitting civilians because they are in need of popular support.
"For extremists to target police is like hitting a symbol of repression, it can help them rally a segment of the population," she said.
She and other analysts blame the recent surge of violence on the influx of men and technology Algerian terrorists have received from al Qaeda in Iraq, and fear the attacks could continue as Algeria builds up for presidential elections next year.
Suicide attacks were unheard-of before the Algerian group linked-up with al Qaeda.
In December, a double suicide bombing in Algiers killed 41 people, including 17 U.N. workers. In April 2007, coordinated suicide strikes against the main government offices in central Algiers and a police station killed 33.
Several newspapers also reported Tuesday an ambush by similar suspected Islamist militants that killed 12 people Sunday. The ambush in the Skikda locality, 500 kilometers (310 miles) east of Algiers, had apparently targeted the military commander of the region and his police escort, the reports said.
The Al Watan newspaper, usually well informed on terrorism cases, reported the case Tuesday along with several other dailies. Authorities did not immediately comment on the attack.
In a similar attack three days earlier, militants killed the military chief for the Jijel area, also east of Algiers, local media reported.
The attack alarmed the U.S. and European governments, as well.
U.S. State Department spokesman Robert Wood told reporters the U.S. condemns the attack, calling it "another example of the reach of extremists."
"We support the government of Algeria as best we can in trying to fight this," he said.
The European Union said it "very firmly condemns the terrorist acts that have just claimed so many lives." The Algerian people are "once again victims of blind and barbaric terrorist violence," said an EU statement.
French President Nicolas Sarkozy, the German chancellor and the Italian premier also personally expressed their support to Algeria's president and offered their condolences to the family of the victims.