Suspected Islamic militants bombed a busy market in southern Thailand on Tuesday, wounding more than three dozen civilians a day after a rebel ambush killed eight soldiers.

The attacks came as the separatist rebellion entered its fifth year and as Thailand prepared to bring in a new government.

Also Tuesday, the Cabinet renewed an emergency decree that gives security forces special powers of arrest in three southernmost provinces, government spokesman Chaiya Yimwilai said.

The insurgency in mostly Buddhist Thailand's Muslim-majority deep south has taken the lives of more than 2,800 people since flaring in January 2004.

Little progress has been made in curbing the violence despite the presence of nearly 40,000 police and soldiers in the region, as well as several changes of military leadership and strategy.

Many southern Muslims feel unfairly treated by the country's Buddhist majority, and their discontent has fueled separatist movements since Thailand annexed the area a century ago.

"During the past few months the situation seemed to quiet down, maybe because of heavy suppression by the government," said Muslim academic Vitaya Visetrat.

"The insurgents use the communist tactic of fighting the authorities based on the motto, 'When you come, I go hide; when you are not alert, I will strike,"' Vitaya said.

Tuesday's bombing at a market in the capital of Yala province wounded at least 39 people, six critically.

The bomb was hidden in a motorcycle and exploded shortly after a young Muslim man parked the vehicle, said police Col. Phumphet Phiphatphetphum.

The attack came a day after eight soldiers were killed in an ambush. One of the victims was decapitated after his death.

Lt. Col. Karnnart Nikornyanont, the local army commander, said eight suspects were detained in the attack.

The soldiers had been patrolling Narathiwat's Chanae district when a bomb hidden on the road exploded and flipped their truck over, according to the army. The attackers emerged from hiding and fatally shot all the soldiers.

More than 30 people, many of them civilians, have been decapitated during the insurgency. The object appears to be to terrorize Buddhists into leaving the region. Most attacks are on civilians, and usually involve drive-by killings or small bombings.

Six militants escaped from police custody in Narathiwat on Sunday. Since December, seven police officers, two soldiers and a civil servant — all Muslims — have been arrested on charges of leaking confidential information to insurgents.

The government of former Prime Minister Thaksin Shinawatra, ousted by a 2006 coup, pursued a hard-line military approach against the insurgents, but made little headway.

The military-installed interim government that succeeded him vowed to employ more political tactics instead of force to avoid antagonizing southern Muslims, but also failed to stem the violence.

Despite such failures, political parties that contended for a general election in December failed to address the southern crisis during the campaign. It was uncertain what initiatives a new government to be installed within a month would employ.