Nation Building Minister D.M. Dassanayake, whose vehicle was hit by the blast on Tuesday morning in the town of Ja-Ela, 19 km north of Colombo on the road to the island's only international airport, died on the operating table.

"He died a short while ago," said Lalini Gurusinghe, deputy director of the government teaching hospital in the nearby town of Ragama, where the minister and 10 others wounded in the blast were taken.

Local television broadcast footage of the ministers' Toyota Land Cruiser, its windows shattered, sides peppered with shrapnel sprayed by the Claymore fragmentation mine and blood smeared on a rear passenger door and in a pool on the ground.

The bombing is the latest in series of attacks on government officials and the military in recent months, and comes just days after the government said it was formally scrapping a tattered ceasefire which degenerated into renewed civil war in early 2006. The Liberation Tigers of Tamil Eelam (LTTE), who want to carve out an independent state in north and east Sri Lanka, were not immediately available for comment, but routinely deny involvement in such attacks.

"This is definitely by the LTTE," said a military spokesman, declining to be named in line with policy.

The Colombo stock market deepened losses following the news of the blast, and was down 2.2 per cent in early afternoon trade.

The blast came minutes before Prime Minister Ratnasiri Wickramanayake announced parliament had again extended Emergency rule first imposed in late 2005 after the assassination of the island's foreign minister.

It also came a week after a prominent minority Tamil parliamentarian was shot dead in a temple in the capital.

The military says it has killed nearly 100 Tiger rebels since advising mediator Norway last week it was pulling out of the ceasefire pact, a move that has shocked the international community and is seen ruining any hope of resurrecting peace talks to end a 25-year civil war any time soon.

Just minutes before the blast, which took place midway between the capital and the airport, Deputy Tourism Minister Faizal Mustapha impressed on reporters that Sri Lanka was a safe tourist destination.