A motorbike exploded after being driven into a crowded market in India's troubled northeast on Sunday, killing at least one person and wounding 16 others, police said.

The blast occurred less than an hour after Indian Prime Minister Manmohan Singh laid the foundation of a bridge over the Brahmaputra River in a nearby area in Gauhati, the capital of Assam state, said local police official Rajen Singh.

Singh said the motorcycle driver appeared to be carrying the bomb for use at a later time when it blew up unexpectedly.

Police suspect the United Liberation Front of Asom, a rebel group, was responsible for the blast, Singh said. He said there was no history of homicide attacks by the group.

The injured, some of them in critical condition, have been hospitalized in Gauhati, he said.

Prime Minister Singh arrived on a two-day visit to the state on Sunday.

Sunday's attack came a day after the ULFA celebrated the anniversary of its founding on April 7, 1979.

In a statement e-mailed on Saturday to journalists, Arabinda Rajkhowa, the ULFA chairman, reiterated his group's demand for independence from India.

The rebel group's peace talks with the Indian government broke down in September last year after a six-week truce when both sides failed to meet each others' demands. The ULFA responded with violence, killing more than 70 Hindi-speaking migrant workers across Assam.

The northeast has poor infrastructure, widespread unemployment and harbors a bitterness toward the national government that has nurtured dozens of militant groups.