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For updates in Sinhala go to www.vimasuma.com Police spokesman Ranjith Gunesekera said a number of passengers were injured and several were feared dead.
The blast went off inside a railway carriage in Dehiwala, south of the capital on a train bound for Panadura.
Authorities have been warning people to be vigilant for bomb attacks by the Tamil Tigers on civilian targets.
Over the weekend a bomb was discovered in a bus.