The bomb exploded by a bridge near the entrance to Rom Klao School in tambon Yi-ngo at 7.40 am.
The blast wounded Sitinureya Baga and Nadia Jehama, two female Rom Klao School students, who were sitting near the door of the bus.
Sitinureya suffered a broken arm and remains under close observation by doctors, while Nadia sustained shrapnel wounds and is in stable condition.
Police found the remains of an improvised bomb stuffed in a 10kg metal box at the scene. Investigators believe it was detonated by mobile phone.
Pol Col Suthon Sukwiset, superintendent of Yi-ngo police station, said the perpetrators probably targeted soldiers on a pickup truck escorting the bus, but the bomb went off as the bus passed. Rom Klao School sent shaken students and teachers home and cancelled classes indefinitely.
The headmaster, Sakun Thongeard, was wounded and his assistant Warun Thongeard was killed in a shooting late last year outside the school's entrance.
Athasit Ratanaklaew, director of Narathiwat Primary Educational Service Area Office 1, who visited the two injured girls at the hospital, also thought the bombers had not targeted the students.
He said the students would receive financial support for their education.
He also suggested school buses should travel in front of their escorts to lessen the risk of a repeat of the incident.
Meanwhile, in Yala's Raman district, a bomb exploded in a rubber plantation, but there were no reports of casualties.
Two unexploded bombs were also recovered at the scene.
Deputy Prime Minister Yutthasak Sasiprapa yesterday urged military units which the army plans to deploy in the deep South for the first time in early October to take extra precautions.
"New personnel take time to adapt to the area and its people, which makes them vulnerable. They should therefore be careful," Gen Yutthasak said.
Meanwhile, the Internal Security Operations Command's fourth region, the Southern Border Provinces Administrative Centre, security units, civil society groups and several rebel defectors yesterday attended a meeting in Pattani to discuss the formation of a new committee to solve the southern unrest.
The committee will be a platform for state agencies, local people, and defectors to work together to bring peace to the restive region.
Once up and running, the committee may take a lead role in holding talks with potential rebel defectors, Gen Yutthasak said.
In Pattani municipality, vendors at the city's fresh market say the market will be closed today because of rumours of a possible attack there.
The rumours began after last Friday's car bombing in Sai Buri district which killed six people and injured scores of others.