Police spokesman S.P Ajith Rohana said that 38 passengers who were in the bus at the time as well as the driver and conductor were taken in for questioning following the detection.
The police said that the explosives were hidden under the seat of the bus in a bag and the owner of the bag had not been identified.
Among the explosives found were 300 grams of gun powder, three electric detonators, a roll of fuse and bullets.
The army discovered the explosives when the bus was searched at Omanthai. Further investigations are underway.