Suspected Tamil Tiger rebels set off the blast as troops drove in an autorickshaw in Vavuniya district, an area of ongoing heavy fighting between the government and guerrillas, a defence official said.
The attack came as troops and the Liberation Tigers of Tamil Eelam (LTTE) were locked in heavy combat along the frontline separating the Tigers' mini state in the north and government-controlled areas of the island.
The latest defence ministry figures place the number of rebels killed by security forces since the start of the year at 2,105, against the deaths of 124 government soldiers.
Casualty figures cannot be independently verified as the government prevents reporters and rights groups from visiting frontline areas.
Sri Lanka pulled out of a six-year truce with the LTTE in January, saying it had the upper hand to crush the rebels militarily, and fighting has since escalated.
Tens of thousands of people have been killed since the conflict erupted in 1972.