At least 26 people were killed and 64 injured on Wednesday when suspected Liberation Tigers of Tamil Eelam militants blew up a bus in Buttala in south-eastern Sri Lanka [Images] just as the government formally ended the tattered 2002 ceasefire with the rebels.

"The roadside bomb targeting the bus exploded at 7.40 am," military spokesman Udaya Nanayakkara said, adding it was followed by another explosion.

An armoured military vehicle was damaged in the second blast in the same area in which three soldiers were injured, he said.

The bus, ferrying a large number of school children, ran over the claymore mine on a lonely stretch along the Niyadella-Buttala road, 240 km from from Colombo, senior police official Daya Samaraweera said.

At least three children were among 26 killed in the bombing, the latest in a string of attacks by the rebels amid spiralling fighting in the north which has claimed 300 lives in the two weeks since the government announced its decision to scrap the ceasefire.

At least 64 people were injured and were rushed to the Buttala and Moneragala hospitals, sources said, adding the toll was likely to rise.

Chief Minister Vijithamun Soysa has announced an indefinite closure of schools in Uva Province.

There were rumours on Tuesday that schools in the country could be closed for two or three months due to the increased hostilities between the government forces and the LTTE. However, the government has denied any such move.

Army chief Sarath Fonseka had told foreign journalists last week that the year may witness escalated fighting with the LTTE as it could be a 'decisive' phase.