The incident occurred around 11.30 a.m. when the General Bus Stand, as it is known, was teeming with people.

Inspector General of Police Manish Kumar Sinha said the grenade rolled under the parked bus that was headed to Uttarakhand.

The explosion also injured passengers in a nearby parked bus which was set to leave for Amritsar in Punjab.

One of the badly wounded civilians succumbed to his injuries in a hospital, Sinha said. He has been identified as a 20-year-old man from Uttarakhand.

"Four others have suffered critical injuries," a police officer said.

The area was cordoned off after the explosion but the militant merged into the crowd and escaped.

Some witnesses said they initially thought the sound had been caused by a tyre burst.

"At first, we thought it was a tyre burst. But when we approached the site, we saw people lying injured and in critical condition," said Sunil Kumar, 26.

Thursday's is the third such attack at the Jammu General Bus Stand by militants in the last nine months.