The number of the wounded was low as the bus conductor had seen an unattended package on the bus and the vehicle was evacuated.

The defence ministry said in a statement: "No doubt this explosion marks another LTTE attempt to cause mayhem in the island's capital, targeting innocent civilians, when it is facing fierce assaults by the security forces."

Intensified operation

The explosion came a day after the government intensified an operation to take Kilinochchi, the rebel LTTE's northern headquarters, which it said they were on track to take.

Mahinda Rajapakse, the Sri Lankan president, said late on Monday that the government, which pulled out of a truce with the rebels in January, ruled out any new ceasefire and said troops were advancing "very satisfactorily".

"I am happy. The military has made a lot of gains," he said.

"We will hopefully take Kilinochchi by December; the rest [of the north] as soon as possible. I can't give an exact time frame."

But the pro-LTTE Tamil.com website said on Tuesday that rebel fighters had repelled a government attack in the Kilinochchi district on Monday, killing 22 soldiers and injuring 53.

The government has ordered aid workers to leave the north, saying that it cannot guarantee their security.

Journalists are already barred from the area, making the veracity of conflicting sides' claims uncertain.

The civil war in Sri Lanka has continued since 1972, with an estimated 70,000 people dying due to the conflict.

The Sri Lankan government has stepped up its offensive against the LTTE since January.

The defence ministry claims at least 6,500 rebels were killed this year. It said around 640 soldiers also died in the fighting.