Colombo - A Navy merchant vessel was sunk by an underwater explosion in the early hours of Saturday, while moored in a harbour under high security, the Defence Ministry said.

The explosion took place at the Trincomalee harbour, 240 kilometres north east of the capital, hours ahead of a crucial provincial election in the eastern province.

The ship identified as A-520 (MV Invincible) was used by the Navy for logistical purposes including the movement of security personnel.

The Defence ministry said no lives were lost in the explosion.

A-520 was a merchant vessel built in 1970's and handed over to the Sri Lanka Navy by court order after it was apprehended while transporting 254 illegal migrants off southern Sri Lanka.

The Defence Ministry did not blame the Tamil rebels for the incident, though other security sources said they believe that the rebels could have infiltrated the harbour and set off the underwater explosion.

On Friday 11 civilians were killed and 36 were injured when a parcel bomb went off inside a restaurant in Ampara, 320 kilometres east of the capital. A provincial election is also being held in Ampara. (dpa)