The bus traveling from the southern city of Pyatigorsk was near a police post on the administrative border of the North Ossetia region when the fire broke out, said Oleg Ugnivnenko, a spokesman for the regional Emergency Situation Ministry. The explosion happened shortly after.
One child was among those killed, he said.
North Ossetia is next to violence-wracked Chechnya. Beslan, in North Ossetia, was the site of a 2004 school hostage seizure that resulted in the deaths of more than 330 people.
Federal Security Service and Interior Ministry investigators on the scene consider terrorism to be the likely cause, Ugnivnenko said. The RIA-Novosti news agency, citing an unnamed law enforcement official, said the blast may have been caused by an explosive device in the road.
However, a duty officer for the North Ossetia Interior Ministry told The Associated Press that the device had been planted on the bus, possibly while it was parked near a police post awaiting a sweep by officers. The officer asked not to be named since he was not authorized to speak to the media.
A total of 19 people, including two drivers, were on the bus. No further details were available.