Initial reports identified the lone fatality as SSgt. Remegio Pepania and the wounded as Airman 1st Class Sukarno Kannano and Police Officer 2 Monil Majan.
Local residents found the bomb inside a black plastic bag at the gate of the Plaza Rizal in Jolo close to Honey Bee restaurant and alerted the authorities who sent an Army bomb squad to defuse the explosive device.
Army Maj. Bartolome Bacarro, deputy information chief of the Zamboanga City-based military Southern Command (Southcom), said residents made the tip off, prompting them to deploy bomb disposal experts at the vicinity of Plaza Rizal along Serantes street in the town.
"The bomb exploded while being recovered and disarmed by the government troopers at the vicinity of Plaza Rizal fronting Honey Bee restaurant that resulted in the killing of a government trooper who was disarming the bomb," Bacarro said.
"There was no civilian casualty from the explosion as the area was already secured and cordoned by the military," he added.
Brig. Gen. Gabriel Habacon, head of an anti-terrorist task force in Jolo, said intelligence reports
indicated the extremist Abu Sayyaf planned to set off a bomb during the towns Independence Day celebrations.
The reports prompted authorities to transfer the celebrations from the plaza to the municipal hall compound, he said.
Armed Forces of the Philippines (AFP) spokesman Lt. Col. Daniel Lucero said the bomb was fashioned from an 81-mm. mortar shell.
The device is similar to those manufactured by Muslim separatist guerrillas and the Abu Sayyaf, which is active in Jolo, Lucero said.
He said the bomb was "probably remote controlled."
"We are still investigating to determine who may be behind the attack," Southcom chief Lt. Gen. Roy Kyamco said.
Witnesses said a sergeant from the bomb disposal team was cutting wires attached to the device when it exploded. His body parts were strewn across the street.
Shrapnel hit an Air Force serviceman and a police officer who were trying keep onlookers away from the site, witnesses said.
Kannano was flown to a military hospital in Zamboanga City while Majan was taken to a local hospital, Lucero said.
Doctors said the two men were under observation. The airman suffered chest wounds and the police officer was hit in the head, they said.
Earlier this month, a suspected Abu Sayyaf member was arrested with bomb-making materials, including 81-mm mortar shells.
Naval intelligence agents arrested the suspect, Alzhezar Jila, following a tip-off from an informant who claimed the Abu Sayyaf planned to bomb a ferry between Jolo and Zamboanga.
The Abu Sayyaf has been blamed for several bomb attacks. The group also has claimed that it bombed the SuperFerry 14 off Manila that caught fire after an explosion on Feb. 27, killing more than 100 people.
Police have arrested the alleged ferry bomber, but investigators have found no forensic evidence backing the bandit groups claim. - Roel Pareño