Security is tight in southern Thailand

Police said the bomb was found outside a branch of the Thai Military Bank, in the Tak Bai district of Narathiwat province.

A police spokesman said the bomb was one of the most powerful ever found in the area.

Narathiwat is one of four southern provinces hit by a spate of recent attacks by Islamic insurgents.

More than 250 people have been killed in the violence which has plagued the region since January.

The bomb was discovered by a bank employee, who notified the authorities.

Police spokesman Metha Singhara said the device "could have caused the loss of many lives and serious damage to property if it had blown up".

Experts used a powerful water cannon to destroy the bomb, which was made from ammonium nitrate, nails and plastic explosive.

The unrest in southern Thailand began in January, with militants targeting officials, teachers and police.

Since then, there have been a spate of violent attacks, the worst of which was on 28 April, when more than 100 suspected militants were killed after launching a co-ordinated series of raids on government posts.

On Thursday, police killed a suspected militant for failing to stop his vehicle at a checkpoint in Yala province.

The unidentified man broke through one checkpoint and was approaching a second when police opened fire.

They later found that the man had been armed with a machete and a grenade.