"The International Committee of the Red Cross deplores the civilian casualties caused by an attack yesterday on a civilian bus in Ambalangoda, Ampara district," it said in a statement.
"The ICRC is deeply concerned about the rising number of civilians being injured or killed as a result of deliberate attacks in Sri Lanka's escalating violence," said Toon Vandenhove, head of the ICRC delegation in Colombo.
Sri Lanka's defence ministry accused Tamil Tiger rebels of setting off the blast, which coincided with a key Buddhist holiday, while the guerrillas denied they were responsible for the attack against civilians.
Passengers were getting off the bus to be checked by troops manning a road block when the blast occurred just outside the town of Ampara, 350 kilometres (220 miles) east of Colombo, a local police officer said.
The ICRC urged all parties to the conflict to respect international humanitarian law, which prohibits direct attacks against civilians and civilian objects in all circums