It was the first major bomb blast reported in the country since government troops crushed the Tamil Tiger rebels in May, after a 25-year insurgency for an independent homeland.
Military spokesman Brig. Udaya Nanayakkara said a private dispute is suspected behind the blast. He said an investigation is continuing.
He said the bomb had been set up to explode when the engine was started Friday morning near the town of Kurunegala.
The Tamil Tiger rebels had frequently targeted public transport killing and wounded hosts of civilians. Between 80,000 to 100,000 people were killed in Sri Lanka's civil war.