At least 25 people were killed and more than 40 wounded when a suspected Tamil Tiger bomb ripped through a packed commuter bus on the outskirts of the Sri Lankan capital on Friday, the military said.

The blast, which struck the bus in a residential suburb during the evening rush hour, was the latest incident in a bloody week in Sri Lanka, where government forces and Tiger rebels are locked in a violent new chapter of a 25-year civil war.

"It's a parcel bomb of about 3kg (6 lbs) with a time device. It was placed in the middle of the bus," said an official of the bomb disposal squad, who asked not to be named.

W. Gunawardena, a doctor at the Colombo South Teaching Hospital, said earlier that 12 bodies had so far been admitted, including a child.

"I was with my mother and brother at the bus halt going back home after classes," said 14-year-old Ishani Perera at the hospital, where she was being treated for injuries to her arms.

"Suddenly I heard a loud explosion and everybody around fell down. I too fell. I can't find my mother now."

The Sri Lankan military blamed the Liberation Tigers of Tamil Eelam, who are fighting for an independent state in the north and east of the island, for the attack.

"It's definitely by the LTTE, with the recent losses and battlefield defeats they are desperate," said a military spokesman, Brigadier Udaya Nanayakkara.

Dozens of Tamil Tiger fighters and government troops were killed this week in heavy fighting on the Jaffna Peninsula in the far north.

Fighting between government forces and the Tigers has intensified since the government formally pulled out of a six-year-old ceasefire pact in January.

After driving the rebels out of the east, President Mahinda Rajapaksa's government has pledged to destroy them militarily.

The rebels have hit back with bombings in Colombo and elsewhere in the relatively peaceful south when they have come under military pressure in the past.