Kathmandu  - One person was killed and another injured after a bomb exploded at a government office in south-western Nepal, police said Monday.

The bomb went off at the Transport Management Office in the town of Nepalgunj, about 350 kilometres south-west of the Nepalese capital Kathmandu.

Police said the blast occurred inside the building as people assembled.

"One person died on the spot and another was injured in the blast," Police Inspector Pradip Kumar said. "Both victims were not government employees or security personnel."

The explosions also severely damaged a portion of the office building, the police said.

No group has claimed responsibility for the blast, but police say they suspect armed groups operating in the region to be behind the incident.

Nepalgunj is a major regional town which has seen escalating violence in recent months.

The town is located in the restive southern Nepalese plains known as Terai, where a number of armed groups are operating.

The groups have been blamed for similar bombings of government and private offices or public areas, and have been accused of murder and extortion.

Several attempts by the Nepalese government to bring the armed rebel groups to the negotiating table have so far failed.

At least 250 people have died in continuing violence in southern Nepal in the past two years. (dpa)