"Seven people were dead on arrival. We have 17 other people who are injured and being treated now," said Colombo National Hospital director Hector Weerasinghe.
The convoy was escorting a Pakistan embassy vehicle and was hit by a Claymore fragmentation mine, officials said.
A driver from the convoy said the embassy car was slightly damaged, but no-one was hurt. The Pakistani ambassador was reported to be uninjured.
The attack came just hours after a suspected Tamil Tiger front, the High Security Zone Residents' Liberation Force (HSZRLF), threatened to attack civilians if the military continued attacks on rebel territory.
Ealier on Monday the Tigers accused the military of killing 43 schoolgirls after the orphanage they were studying at, which is in the rebel controlled north east of the country, was bombed.
"The Sri Lankan air force bombed the premises of an orphanage where schoolgirls were studying first aid," Rasiah Ilanthiraiyan, a rebel spokesman, said.
A car bomb exploded in Colombo
less than one week ago
"Forty-three students were killed and 60 wounded. The students were between 15 and 18 years old," he said.
The military said it had launched air strikes on identified LTTE targets such as camps in the northeast, but gave no further details.
With communications in the conflict-hit areas extremely limited, the LTTE report could not be immediately confirmed.
Aid workers estimate that around 100,000 people have been newly displaced during the past three weeks of fighting. Dozens of civilians have been killed amid fears the violence may send the country back into full-blown civil war.
The government said civilian casualties were also likely around the Jaffna peninsula, where the LTTE over-ran government forward positions on Saturday, although the army says they have since been repulsed.
"They have mingled with civilians and are calling artillery fire onto the areas of the security forces," said Major Upali Rajapakse of the National Security Centre.
"It is falling in and around civilian areas. There has to be civilian dead," he said.
The LTTE have intensified their attacks after the government called on the rebels to surrender on Saturday.
The country's east was quiet but artillery rained down on Kayts island, just to the west of Jaffna town, Mahinda Rajapakse, the Sri Lankan president, said.
The Tigers have accused the government of killing 15 civilians after army rockets and shells hit a church, but there was no independent confirmation.