The bus was attacked in Puliyankulam village in the north while transporting people who fled the embattled region into government territory, military spokesman Brig. Udaya Nanayakkara said.
Rebel officials could not be contacted for comment. The military's claim could not be independently verified because independent journalists are barred from the war zone.
A 59-year-old woman was killed and the wounded included four children, Nanayakkara said.
The government has accused the Tigers — who have recently lost their main strongholds to government forces and are cornered in a small sliver of coastal land — of holding scores of people as human shields and killing civilians who want to escape. The rebels have denied the allegations.
Meanwhile, air force jets bombed an area where rebel boats were concealed, the military said without elaborating.
The Red Cross said it is negotiating with the government and rebels to allow the sick and wounded in the war zone to travel to hospitals in government territory.
International Committee of the Red Cross spokeswoman Sarasi Wijeratne said wounded civilians continue to flock to a makeshift hospital in rebel-held Putumattalan village, which is overwhelmed despite moving 640 patients and their relatives from the facility earlier this week.
Thurairajah Varatharajah, a doctor at the hospital, said Friday that about 40 people are being killed every day and scores wounded, while the makeshift hospital is struggling with a shortage of medicines.
The government denies there are drug shortages or that it has targeted civilians.
On Friday troops fought the Tigers near Vishwamadu village, which was recently captured by the government, and found five rebel bodies along with assault rifles, Nanayakkara said.
The recent military victories have provided the government with its best chance of militarily crushing the rebels and ending their 25-year campaign for an independent homeland for the country's ethnic minority Tamils, who have suffered marginalization by successive governments controlled by ethnic Sinhalese.
More than 70,000 have been killed in the violence.
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