It was the first deadly bomb attack in Bangkok since troops and red shirt protesters clashed over April and May.

At least 90 people were killed and 1,900 wounded in the worst political violence in modern Thai history.

Largely stable
  
Thailand had been largely stable since the army crackdown.

Most protest leaders are either in detention and facing terrorism charges, or on the run.

Thailand's financial markets and economy have bounced back.

A state of emergency that allows authorities to detain people without charge, censor the press, ban public gatherings and freeze bank accounts remains in force.

"What just happened is a clear confirmation of why we need to keep an emergency decree in place in some areas," said a government spokesman.

"The situation isn't completely safe and calm."

Al Jazeera's Aela Callan, reporting from Bangkok said "Ironically the bombsite is next to the burned out Central World Mall, which is a huge shopping mall that was destroyed in the Red Shirt violence that gripped Bangkok back in may.

"It appears that the bomb was hidden in some kind of garbage bag, and police forensics are on the scene now trying to figure out what exactly was the cause of the explosion."

Candidate in jail

The blast took place shortly after polls closed in a toughly fought by-election, the first electoral test since the end of the anti-government protests.

The opposition candidate, Korkaew Pikulthong, has been jailed since May for allegedly encouraging violence, a charge he denies.

He campaigned from prison, saying he had public sympathy for being held without bail.

Korkaew, whose Puea Thai Party is closely allied with self-exiled former Prime Minister Thaksin Shinawatra, faced Panich Wikisreth, a member of Prime Minister Abhisit Vejjajiva's ruling Democrat Party and a former deputy Bangkok mayor.

Panich won with 96,480 votes, according to unofficial early results. Korkaew came in second with 81,776.

The mostly rural and urban poor red shirts, supporters of twice-elected Thaksin, say Abhisit has no popular mandate and came to power illegitimately, heading a coalition the military cobbled together after courts dissolved a pro-Thaksin party that led the previous government.

Abhisit says he was voted into office by the same parliament that picked his Thaksin-allied predecessors.