The bomb, planted on a parked bicycle, damaged several shops in the market busy with people shopping ahead of the traditional Sinhalese and Tamil New Year festivities on Thursday and Friday.

"It was a bicycle bomb," a police official in Trincomalee said. The blast occurred after a Claymore fragmentation mine killed two constables in the same district. An indefinite curfew was clamped on the area as rioting erupted after the market blast. At least seven shops of Tamils were torched by Sinhalese mobs and several vehicles were damaged, police said.

Mobs attacked two passengers of a van, which was set on fire near the town, police said, adding the victims were yet to be identified. The government sent Industrial Development Minister Rohitha Bogollegama, who is also a government peace negotiator, to Trincomalee, 260 kilometres northeast of Colombo to try to restore order, officials said.

The latest bombing raised to 37 the number of people killed in the past three days and raised fears for next week's scheduled talks between the government and Tamil Tiger rebels.