An LBO correspondent at the Colombo South hospital in Kalubowila said 15 injured had been admitted to the hospital. One dead body has also been brought.
Witnesses saw fire engines speeding towards the area.
The blast occurred during the evening rush hour and is the latest in a series of deadly explosions blamed on Tamil Tiger guerrillas..
The blast came as the military said it gained control of an area in the Northwestern Mannar area and the guerrillas beat back an offensive in the northern Jaffna peninsular with heavy casualties.
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