(Adds police statement, changes dateline)

SHANGHAI, May 5 (Reuters) - Three people died and 12 were injured when a bus caught fire during the morning rush hour in Shanghai on Monday, police said.

The fire broke out when "flammable materials" carried by a passenger ignited, municipal police said in a statement on their Web site, without describing the materials. An investigation was continuing.

Reports by Chinese official media said there were between 30 and 50 passengers on the bus. The state-run Xinhua news agency initially said the bus "exploded", but later dropped that description. (Reporting by Alfred Cang; Editing by Sanjeev Miglani)

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