Suspected Sri Lankan Tamil Tiger rebels killed 58 people in a claymore mine attack on a bus carrying civilian passengers, officials said on Thursday, by far the most serious attack since a 2002 ceasefire.

Some 500 people have been killed since early April as talks between the government and Liberation Tigers of Tamil Eelam (LTTE) collapsed and many now fear a slide back into the island's two decade civil war.

Sri Lankan soldiers. The death toll in a bus blast in Sri Lanka rose to 30, with another 40 passengers wounded, the military said. [AFP]

"There are 58 dead, 45 injured," said army spokesman Brigadier Prasad Samarasinghe. "There are children, small boys, ladies and clergy."

The Tigers were not immediately available for comment, but have previously denied involvement in similar attacks on troops across the minority Tamil dominated north and east, where they want a separate homeland.

Officials said most of the dead were likely to be from the island's Sinhalese majority.

The attackers used a claymore mine, a block of plastic explosive that sends a hail of ball-bearings toward its target, in the north-central province of Anuradapura, police said.

The government said it was still digesting the news. It has retaliated for some previous attacks by launching air strikes on rebel territory.

Wanting Backlash?

They said they believed the Tigers wanted to spark Sinhalese attacks on ethnic Tamils, driving them into the arms of the rebels.

"Without doubt, this is intended to create a civilian backlash," said head of the government peace secretariat Palitha Kohona. He said he hoped and believed it would not succeed.

Further north in the town of Vavuniya, near the border with rebel territory, police said they had found what they suspected was a bomb near a fish market. The bomb squad was at the scene, they said.

Diplomats fear Sri Lanka's peace process is reaching its endgame.

The Tigers pulled out of peace talks in April but had agreed to talks last week in Oslo over the safety of ceasefire monitors. But on arrival, they refused to meet the government.

Diplomats say neither the government nor the Tigers have shown sufficient flexibility and fear that if violence continues the country will gradually fall back into a war that has already killed more than 64,000 people.