MANILA, June 4 (Reuters) - Philippine soldiers defused a crude bomb left inside a packed commuter bus in the volatile south of the country, an army spokesman said on Monday.

Lieutenant-Colonel Julieto Ando said the improvised bomb was found inside a bag that was left by two male passengers after a Cotabato City-bound bus made a stopover at a terminal on Sunday night.

"Our troops defused the bomb placed inside a plastic pitcher and hidden in a bag under a bus seat," Ando said, adding a watch and several kilos of one-inch nails were found attached to the explosives.

"Our soldiers were helping the local police investigate the incident. We've been receiving streams of intelligence reports about bomb plots in the area."

On Friday, the U.S. embassy in Manila warned its citizens about a terrorist plot to bomb bus terminals and public markets in two Christian-dominated cities in North Cotabato province, on Mindanao island.

"The embassy has information that terrorists may be planning to carry out bombings at bus terminals and public market places in Kidapawan and Makilala in North Cotabato, Mindanao over the next several days," the embassy said.

In an earlier travel advisory, the U.S. embassy identified Islamic militants from Jemaah Islamiah, Abu Sayyaf, and groups that broke away from the Moro Islamic Liberation Front behind attacks on the southern island of Mindanao.

On Jan. 10, 2007, seven people were killed and 41 wounded in three separate blasts in Cotabato, Kidapawan and General Santos cities.

Philippine authorities blamed the Jemaah Islamiah and Abu Sayyaf militants for the attacks.

Last month, 11 people were killed and nearly 100 wounded in two bomb attacks in Cotabato and Tacuron cities, also blamed on the Abu Sayyaf, the country's deadliest militant group which has links to al Qaeda.

Abu Sayyaf was also blamed for the worst terrorist attack in the Philippines, the February 2004 bombing of a ferry that killed more than 100 people.

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