"Two bombs blew up in two hotels last night. The second blast occurred just three minutes after the first," said Tamrat Abera, police chief for the town of Negelle Borena.

Information Ministry spokesman Zemedkum Tekle had earlier mentioned only one blast taking place on Wednesday and gave a casualty toll of three killed and five wounded.

Negelle Borena is a small town 595 kilometers south of the capital Addis Ababa, in the Oromo region, where rebels have fought for years over claims of marginalization by the government.

"Some had their legs blown off. There was also serious damage to private and public property," Tamrat told AFP. "We are undertaking a massive manhunt as we have been given details of what the bomber looked like."

He said that the first bomb went off in a hotel called Kidane Mihret and the second in Shuferoch hotel, just a few yards away.

No armed group has yet claimed responsibility for the bombings.

The twin bomb attack came as the regime of Ethiopian Prime Minister Meles Zenawi celebrated Wednesday the 17th anniversary of former president Mengistu Haile Mariam's ouster.

The authorities, who made several arrests, blamed last week's explosion on arch-foe Eritrea and the Oromo Liberation Front (OLF).

Three people were also killed and 18 wounded in bomb blasts at petrol stations in Addis Ababa on April 14.