Reports quoting witnesses spoke of a loud explosion in Colombo's commercial quarter and black smoke rising from an area near the Hilton Hotel.
The area is home to the official residence of Sri Lanka's president, besides the Hilton Hotel and the twin-tower World Trade Centre office complex.
Udaya Nanayakkara, a Sri Lankan military spokesman, said government officials had recovered a larger number of explosive devices from LTTE strongholds, "so we are progressing very well".
'Most secure areas'
Speaking of Friday's suicide attack, Minelle Fernandez, Al Jazeera's correspondent in Sri Lanka, said: "This is one of the most secure areas and one of Colombo's most commercial hubs, where the bomb exploded.
"Though there is a visible security presence in that area, the fighters just have to get lucky once so they can manage to strike with their effectiveness."
"People in Colombo were expecting a very large demonstration today, and that's why the explosion occurred.
"It seems the capital is very vulnerable to such attacks but, even worse, civilians are being caught up in this civil conflict."