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Sabotage or attack was unlikely to be involved, an official source said, though the devastation will have stirred memories of a train bombing in Madrid in 2004, carried out by Islamist extremists, that killed 191 people.
The source said speeding may be the cause of the derailment.
The Santiago de Compostela train operated by state rail company Renfe with 247 people on board derailed as the city prepared for the festival of Saint James, when thousands of Christian pilgrims from across the world pack the streets.
The city’s tourism board said all festivities, including the traditional High Mass at the centuries-old cathedral, were cancelled as the city went into mourning following the crash.