Bomb exploded inside the bus

Police say the incident took place near the tourist resort of Hikkaduwa, south of the capital Colombo.

The attack comes a day after a similar incident which killed six people on a bus north-east of Colombo.

Tamil Tigers rebels have been blamed for the attacks, though they deny any responsibility and say they condemn the killing of innocent civilians.

Earlier on Saturday, three bomb blasts were reported in the north of the country, one of which killed four soldiers and a civilian.

The incident occurred when a roadside bomb exploded near a truck transporting troops in the northern district of Vavuniya.

Meanwhile, in the east of the country, the government is trying to capture some areas now under Tamil Tiger control.

The BBC's Roland Buerk in Colombo says both sides are supposed to be observing a ceasefire, but the agreement has been left in tatters by fighting in which more than 3,500 people were killed last year.