A car bomb exploded Thursday near a tourist hotel in southern Thailand, killing five people and wounding more than 40 in the nation's first such attack, authorities said, and the prime minister threatened to "lay siege" to villages supporting separatists in the predominantly Muslim region.

The car bombing — the first in Thailand — struck near the Marina Hotel in Sungai Kolok (search), a town on the border with Malaysia that is popular with male tourists for its nightlife. The blast took place on a street with many open-front bars.

The bomb was planted inside a car and likely triggered by mobile phone, police Lt. Col. Wej Suwannaraj said.

"This is the biggest bombing ever to occur in this region," said Narathiwat province's Gov. Pracha Tehrat, adding it was Thailand's first car bombing.

Asked if foreign Islamic militants might have been involved, the acting army commander for the area, Maj. Gen. Khwanchart Klaharn, said: "It is still unclear. It is like other similar attempts to cause disturbances in the south."

Sungai Kolok has been the site of other bombings in recent years that have caused several fatalities, including a number of Malaysians. In March 2004, the Marina Hotel was hit by a blast that wounded about 30 people.

More than 650 people died in attacks last year in the southern provinces of Pattani (search), Yala and Narathiwat (search) — violence the government blames on a Muslim insurgency. Earlier Thursday, gunmen killed a Buddhist villager in Narathiwat's Ruesor district.

Thursday's attacks came as Prime Minister Thaksin Shinawatra (search) was touring the south and designated 358 villages in those provinces as "red zones" — hostile to state power and sympathetic to Islamic rebels. About 200 of those villages are in Narathiwat province.

Thaksin told villagers in the border town of Betong that the government planned to give more than $519 million in assistance to villages countrywide by April — except to those designated as "red zones."

"I don't want the money going toward supporting insurgents in the red-zone villages. I don't want the money to be used to buy guns and bombs. ... No one can use our money to separate (the three southernmost provinces) from Thailand.

"If the money sanctions do not work, I will send soldiers to lay siege to the red zone villages and put more pressure on them," Thaksin said.

But Abdulrohman Abdulsamad, chairman of the Islamic Council of Narathiwat, warned that slashing development funds would only push villagers closer to the militants and pave the way for local and international Muslim extremists.

"The Muslim world is monitoring the developments in this region closely, and when they find that we are being ignored or sanctioned by the government then they will step in to help," he said.

Instead, the government should give more money to the area to win the trust of people, he said.

Although Thaksin was re-elected in a landslide victory Feb. 6, voters in Yala, Narathiwat and Pattani did not support any candidates from his Thai Rak Thai Party (search).