A car explosion in Bahrain has killed two people and wounded a third in a mostly Shia village, the interior ministry said.

The ministry said on its Twitter account that Saturday’s blast was in the village of al-Maqshaa', along the Budayya highway, outside of the capital Manama.

"Initial inspections uncovered two burnt bodies and a third with burn wounds was taken to hospital," the ministry said.

There were signs the car contained explosive substances, it added.

No further details were given on whether the vehicle it had been targeted directly or whether the blast had been accidental.

Witnesses said they heard a loud bang shortly before the car was gutted by fire, and that authorities cordoned off the area.

The Gulf Kingdom has been hit by several small bombings in recent weeks as the Sunni Muslim government struggled with continued unrest from its Shia Muslim community.

Bahrain's majority Shia Muslim population has been calling for political reforms and an end to perceived discrimination. Bahrain denies any discrimination.

Authorities quelled a 2011 uprising that was inspired by Arab Spring protests in other countries, but many Shia areas are still witnessing near daily clashes with police.

In one of the most serious recent attacks, three policemen were killed in a bomb attack in March in the village of Daih while security forces were trying to disperse a group who were blocking roads in the village after a funeral.

Since then, several explosions, mostly of homemade bombs, have injured at least three policemen in Shia villages around the island.

Source: Agencies