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KATHMANDU, Oct 14 (Reuters) - Three people were killed and five wounded by a powerful bomb that ripped through a market in a small town in southeast Nepal on Tuesday, police said.

"We have information that three people were killed in Chandranigahapur but I have no details," police official Ramesh Thapa said from Gaur, about 75 km (45 miles) southeast of Kathmandu.

The region has been the focus of protests over the last year from ethnic groups demanding more autonomy from Nepal's highland cultures.

Local television channels said the victims were a woman and two children.

Shiva Nepal, the district administrator of the area, said security had been beefed up in the area after the blast, which came on the last day of a big annual Hindu festival.

Another official said police lobbed four teargas shells to dispurse angry residents who blocked the main highway in the region demanding better security.

The area is in Nepal's southern plains called the Madhesh along the border with India. More than a dozen armed groups are fighting a low intensity insurgency in the region calling for greater autonomy.

Early this month four people were injured in a similar blast in a mosque in east Nepal.

Nepal has just emerged from a decade-long civil war by the Maoist former rebels, a conflict in which more than 13,000 people were killed.

The Maoists, who signed a peace deal in 2006, are now heading a coalition government after a surprise win in elections for a constituent assembly held in April. The new government has urged the rebel groups in Madhesh for negotiations to end the violence. (Reporting by Gopal Sharma; Editing by David Fox)

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