The attack occurred early on Thursday in Sibasagar,360km (224 miles) east of state capital, Guwahati.

At least 17 other passengers were injured after the bus caught fire following the blast.

The police said the outlawed United Liberation Front of Assam (Ulfa) was responsible for the incident.

The group is fighting for a separate homeland.

The incident happened when a time bomb exploded in a passenger bus near the village of Mathurapur.

'Acts of desperation'

Doctors in Sibsagar said a number of injured passengers were in a critical condition.

The BBC's Subir Bhaumik says the Ulfa rebels had allegedly set off five explosions in northern Assam in the past week.

The separate explosions derailed a goods train, damaged a telephone exchange and an oil pipeline

"The serial blasts are acts of desperation with the Ulfa trying to make its presence felt," Assam chief minister Tarun Gogoi told AFP news agency.

There are about a dozen armed groups fighting authorities in the north-east.

They accuse the central federal government of draining resources and neglecting local economies.

More than 10,000 people have died in separatist violence in Assam since the 1980s.