The blast blamed by police on Muslim separatists came a day after Prime Minister Thaksin Shinawatra vowed to maintain his tough policy against the escalating revolt in the south, which killed more than 650 people last year.
About 300 civil defence volunteers were marching inside a stadium in the province of Narathiwat when the bomb exploded about 100m from where Governor Pracha Tehrat, army officers and the regional police chief were standing, a police officer said.
Initial reports said five military personnel and a woman near the scene were injured, said the police officer.
Leaflets distributed in the area on Wednesday warned people to stay away from government officials and not to cooperate with the authorities.
Separately, a half-dozen armed men fired on a police outpost in Narathiwat province on Wednesday night, wounding two officers, said police Lieutenant-Colonel Ong-art Intonharee.
Unrest in southern Thailand
claimed 650 lives last year
The attackers fled when police called in reinforcements but planted a bomb nearby that killed a civilian, he said.
"There will be no change or adjustment of measures and policies for handling the situation in the south," Thaksin said on Wednesday.
"We are on the right track. People in the region may not understand us today but one day they will understand us."
Thaksin, a landslide winner in Sunday's general election, has been criticised at home and abroad for his tough approach to dealing with Muslims in predominantly Buddhist Thailand.
His Thai Rak Thai party suffered its only major election setback in the three Muslim-dominated provinces of Yala, Pattani and Narathiwat, where Muslims have long felt marginalised.
Thaksin has been criticised for his
approach towards Thai Muslims
"Voters have given a clear message to the government that they are unhappy with government policy during the past four years," said Waredueramae Mamingchi, chairman of the Muslim Council of Pattani province.
"The government should take this message into account and adjust its policy and approach toward the region."
Muslim unrest has persisted for decades in the south and resurfaced last year after a period of relative peace.