The attacker targeted politicians attending a mosque ceremony in the town of Akuressa, and came as the ethnic rebels continue to lose ground in the face of a fierce government offensive on their shrinking northeast base.
Postal Services Minister Mahinda Wijesekera was wounded in the head and airlifted to Colombo for emergency treatment, a spokeswoman for the National Hospital in the capital said.
Culture Minister Mahinda Yapa Abeywardene was initially listed as injured because he was covered in blood but was given the all-clear after the blood was found to have been from other victims.
"We were walking in procession and just passing the entrance to the mosque when there was a blast. I thought it was a big firecracker," Abeywardene told AFP by telephone from Akuressa, 160 kilometers (100 miles) south of Colombo.
"My clothes were covered in blood and I started running. Later I realized that I was not hurt, but I had blood from someone who was hit in the blast.
"There were a lot of school children and I fear a lot of them were wounded."
Muslim men were playing hand drums and performing a dance when the bomber detonated his explosives, witnesses said.
There were large crowds at the ceremony as it was a national holiday marking Milad-un-Nabi festival, or the birthday of the prophet Mohammed.
Military spokesman Udaya Nanayakkara blamed the Liberation Tigers of Tamil Eelam (LTTE).
"It is an LTTE suicide bombing," he said.
Police spokesman Ranjith Gunasekera said 15 people were killed and 60 were wounded. The victims were taken to two main hospitals in the area, which had not previously been hit by Tamil rebel attacks.
Gunasekera said forensic experts were sent to the bomb site to begin investigations.
The guerrillas carried out a similar strike in April 2008, killing highways minister Jeyaraj Fernandopulle as he took part in celebrations ahead of the traditional New Year.
There was no immediate claim of responsibility from the Tamil Tigers over the latest bombing.
The pro-rebel Tamilnet website, however, reported that at least 74 civilians -- many of them children -- had been killed and 100 others wounded Monday and Tuesday in army shelling of the remaining LTTE-controlled part of the island.
It accused the Sri Lankan army of engaging in "intensified indiscriminate shelling" of known civilian areas.
The government insists it is trying to protect civilians and accuses the Tigers of using them as "human shields."
Military officials said heavy exchanges continued in the northeastern Mullaittivu district on Tuesday, after three days of fighting left at least 250 rebels dead.
Security forces on Tuesday recovered 30 more bodies of Tigers killed in Sunday´s fighting, a military official said, adding that several soldiers were killed and wounded.
Two years ago, the Tigers -- who have a long and bloody record of suicide attacks -- controlled large swathes of the north and east of this South Asian island, but have suffered a series of major setbacks.
On Sunday, the government said its plan to defeat the LTTE once and for all had entered its "final phase."
Sri Lankan authorities ban most journalists and aid workers from the entire north of the island, meaning such claims cannot be verified.
The government withdrew from a Norwegian-brokered truce at the start of last year after accusing the Tigers of using the peace process to re-arm.
It has since resisted calls for another truce, saying it has the upper hand and was about to end a conflict that had dragged on since 1972.
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