At least 40 people were wounded on Tuesday when a car bomb exploded outside a supermarket in Thailand's insurgency-plagued south, police said, the largest attack for months on a civilian target in the troubled zone.

The Muslim-majority border region has seethed with violence for over a decade as ethnic Malay insurgents battle the Buddhist-majority state for more autonomy.

The latest attack hit the town of Pattani around 2pm, with two bombs going off outside the Big C, a busy supermarket near the town centre.

The first device was packed inside a motorcycle parked in the car park, officers said, spreading panic among shoppers.

“The second blast was a car bomb,” Pattani police commander Major General Thanongsak Wangsupa told AFP.

Another officer Captain Preecha Prachumchai said the second blast was “huge” adding “around 40 people have been wounded: one is in serious condition”.

Speaking to local media the provincial governor said two people were in a serious condition.

Video posted by a witness on Twitter showed the second blast detonate in a large fireball, sending bystanders running for cover.

Police were on scene and appeared to be encouraging people to move back when the second blast struck.

Pictures posted by rescue workers showed a thick plume of black smoke over the supermarket car park and some damage to the store entrance.

“I heard a very loud explosion,” a resident who lives close to the supermarket told AFP, requesting anonymity.

“Minutes after that, I heard the sirens of rescue cars and ambulances. I feel bad about it... it happened at a place where people go to buy things.”

Near-daily shootings and bomb attacks have claimed more than 6,800 lives since 2004, with both sides accused of rights abuses.

Talks between the Thai junta and an umbrella group claiming to represent the rebel footsoldiers have staggered along for years without resolution.

Thai negotiators do not believe their rebel interlocutors can stop the violence.

The rebels want peace talks to include international observers, discussions on devolving political power and protecting their Malay-Muslim culture.

But shortly before Tuesday's attack junta chief Prayut Chan-O-Cha reiterated his opposition to international help in solving the festering conflict.

“We must keep this issue away from the reach of the international arena,” he told reporters in Bangkok.