The exchange of blame has erupted as a team of senior Indonesian officials arrived in Aceh province on Tuesday to prepare for negotiations with separatist rebels about the release of hostages.
The military says one of the dead has been identified as Syaiful Amri, an active Free Aceh Movement (GAM) member. It says Amri, 25, died when the bomb he was handling exploded prematurely at Peureulak in East Aceh.
But GAM says Syaiful was captured by the military three days before the blast and had been brought to the scene to discredit their movement.
"Like many other bloody incidents, the TNI (armed forces) has engineered more killings just to make us look bad," said Teungku Mansoor, the rebel spokesman for the Peureulak area, in Jakarta.
"Syaiful, who carried an Indonesian ID card under the name of Abdullah Usman, was arrested in Banda Aceh on 28 December. How can he prepare and conduct the bombing from detention?"
GAM's operations commander for the Peureulak area, Ishak Daud, said he believed Amri had been brought to the concert without being told a bomb was about to explode.
But the military denied Syaiful had been arrested before the blast.
"He (Mansoor) can say whatever he wants, the fact is we had not arrested Syaiful as he has claimed," said provincial spokesman Ahmad Yani Basuki.
Thousands have fled in a conflict
that has claimed 12,000 lives
Aceh police spokesman Sayyid Husainy said Syaiful's body was believed to have been closest to the explosion "but we cannot say whether it was an accident or a suicide bombing."
The military is mounting an all-out offensive to crush separatists in Aceh, where GAM has been fighting for independence since 1976. The bomb, which was placed under the stage, was the worst bomb attack in years in the province.
A one-year-old baby girl and a seven year-old boy were among those killed.
Most victims of the separatist war, which has claimed an estimated 12,000 lives since 1976, have been civilians.
Meanwhile, a team of officials arrived in Aceh province to prepare for negotiations with GAM rebels about the release of hostages, including a television cameraman.
The talks, if they take place, would be the first between the
government and the GAM since Jakarta imposed martial law in Aceh on 19 May and launched a huge military offensive against the guerrillas.
Cameraman Fery Santoro and his reporter colleague Ersa Siregar from the Rajawali Citra Televisi Indonesia station were abducted by the guerrillas on 29 June along with their driver and the wives of two army officers.
Troops shot dead Siregar on 29 December during what the military termed a firefight with the rebels. The driver escaped earlier in December.
On Monday, troops shot and killed four suspected guerrillas including a deputy commander and captured six suspected female rebels in several raids and clashes.