The bus was passing the Police sentry at Aaraipattai, seven kilometers south of Batticaloa, when the grenade was lobbed sources said.
Some Police sources claimed that the grenade was lobbed from the bus at the sentry. But residents said that it was vise versa.
The wounded persons have been admitted to the Batticaloa hospital.
Meanwhile, the Special Task Force (STF) in Aaraipattai said this afternoon that they have arrested a suspect identified as Lingaratnam Sooriyakumar of Munaithivu in connection with the grenade blast.
They said that the suspect could be a member of the Liberation Tigers. Munaithivu is a village south west of Batticaloa.
