The blast comes as the military has intensified an offensive in the island nation's north to surround separatist Liberation Tigers of Tamil Eelam (LTTE) rebels.

"It was a bomb placed close to an apple vendor in Pettah," Military spokesman Brigadier Udaya Nanayakkara said.

Military officials speaking on condition of anonymity said the blast was triggered by around 100 grammes of explosives.

Dr. Anil Jansinghe, a director at Colombo National Hospital, said 45 people had been admitted, among them two boys and four women. Most of the wounded suffered minor or moderate injuries, from burns and the blast's shock waves, he said.

"This was definitely the LTTE. They are desperate and taking civilian targets since they are being defeated on the northern battlefront," Nanayakkara said.

The rebels could not be reached for comment. The pro-rebel website www.tamilnet.com described the attack in a story attributed to the police.

At the scene, there was little evidence of a large explosion, but small items sold on wooden stands in the market were strewn onto the street and some blood spattered the pavement. The bomb exploded close to two busy bus stops.

Sri Lanka's government officially scrapped a ceasefire with the Liberation Tigers of Tamil Eelam in January and has vowed to wipe the rebels out by the year's end.

That has prompted increased bombings in Colombo, on Sri Lanka's west coast, by the rebels, who since 1983 have fought to create a separate nation for the minority Tamil people.