A roadside bomb exploded during the evening rush hour near Sri Lanka's capital killing seven civilians.
Military spokesman Brig. Prasad Samarasinghe said a truck carrying police commandos to the capital was hit by the blast in Ratmalana, a suburb of Colombo.
He blamed the Tamil Tiger rebels for the blast, but the rebels later denied the allegation.
Samarasinghe said seven civilians died and 33 others were wounded in the blast. Four police commandos were among the wounded, he said.
"We suspect that the bomb had been planted on the roof or the wall of an abandoned shop," Samarasinghe said.
Rebel spokesman Rasiah Ilanthirayan denied that the Tamil Tiger rebels were responsible for the bomb.
"I only have to say that we have nothing to do with it," Ilanthirayan told The Associated Press.
The explosion occurred during the evening rush hour as many workers were returning home.
It comes amid a worsening separatist conflict in Sri Lanka that has killed more than 5,000 people in the past 18 months, shattering a 5-year-old, Norway-brokered cease-fire viewed as the best opportunity to solve the two-decade-old crisis.
Last Thursday, a bomb blast blamed on Tamil Tiger rebels in the heart of the capital of Colombo killed one soldier and wounded six people.
On Sunday, police commandos found a bomb in Batticaloa, in Sri Lanka's restive east, weighing 25 kilograms (55.12 pounds) and defused it hours after an explosion elsewhere in the region killed three civilians, Lt. Col. Upali Rajapakse of the Defense Ministry information center said.
Roadside bombs that can be triggered by remote control have been commonly used by Tamil rebels in their fight for a Tamil homeland.
The Liberation Tigers of Tamil Eelam rebels have fought the government since 1983 to carve out a separate homeland for the country's 3.1 million ethnic minority Tamils who have suffered decades of discrimination by the majority Sinhalese-dominated state.
About 70,000 people have been killed in the two-decade conflict.