A grenade explosion at a bus stand in Jammu killed one person and wounded at least 29 on Thursday, police said, just weeks after a Pakistan-based militant group killed 40 paramilitary police in nearby Kashmir, almost sparking a war.

"I request everybody to maintain calm," Jammu police chief M.K. Sinha told reporters at the site of the blast. "We are chasing all leads."

The reason for the blast was unknown, but was labelled an "attack" by a senior government minister.

"The grenade attack in Jammu is condemnable," said Finance Minister Arun Jaitley on Twitter. "I wish the injured a speedy recovery."

Jammu and Kashmir is divided between Kashmir, a Muslim-majority region that sees a large number of militant activities, and Jammu, a Hindu-majority region and home to a city of the same name, where such action is less common.