Police blamed the rebel United Liberation Front of Assam for the attack, and said they had killed one insurgent in a separate incident yesterday in the northeastern state of Assam.

Five policemen were among the injured in the grenade attack, which took place around midnight in Dhemaji, a town 550 kilometers (340 miles) north of Gauhati, the capital of Assam, said the state police chief, Deepak Narain Dutt.

The victims of the grenade attack were celebrating Durga Puja, an important festival in eastern India. The attack occurred near a "pandal," a temporary structure set up to worship goddess Durga for her graciousness as well as her fearsome power.

All the injured were hospitalised, Dutt said.

While the rebels were not immediately available to comment on the attack, they have been fighting to carve out a homeland in Assam.

They accuse the federal government of exploiting the state's rich mineral resources and doing little for Assam's indigenous people, who are ethnically closer to the people of China and Myanmar than they are to other Indians.

The violence came days after the rebels pulled out of peace talks with the Indian government after New Delhi scrapped a cease-fire and resumed military operations.