The grenade hit the roof and rolled down the storefront before exploding, wounding nine customers, including a 10-year-old girl, said Maj. Julieto Ando, the local military spokesman.
He said the authorities suspected that the Moro Islamic Liberation Front (MILF) could be flexing its muscles ahead of proposed peace talks.
Local probers identified those injured as Laparecio Mangasar, 55; Christina Mangasar, 50; Jocelyn Cunanan, 40; Lito Ledesma, 56; Francia de la Peña, 10; Elfie Eleazar, 21; Dolor Dulay, 34; Chris Ibarra, 21; and Angelito del Rosario, 42.
Kabacan Mayor Wilfredo Bataga, quoting witnesses, said the grenade thrower casually walked away from the scene.
Since January, Kabacan, an agricultural town in the first district of North Cotabato, has been rocked by bomb attacks which have left dozens of civilian casualties, including children.
Sunday night’s incident was the 14th bomb blast in the municipality.
"We still have to determine the motive behind the bombing and the people behind it," Bataga said.
In another incident, a driver and a government militiaman were killed in attacks by MILF rebels in Maguindanao over the weekend, the military said.
The guerrillas ambushed four motorcycle taxis in Matanog town, instantly killing one driver, military spokesman Col. Fredesvindo Covarrubias said.
Six passengers escaped unscathed and reported the incident to the military, which launched a manhunt for the attackers.
MILF guerrillas also shot dead a militiaman at his home in the neighboring town of Upi.
President Gloria Macapagal-Arroyo declared a unilateral ceasefire with the MILF last month in a bid to reopen negotiations with the 12,500-strong group which has been waging a guerrilla war for more than two decades in pursuit of an independent Islamic state.
Arroyo’s deposed predecessor, Joseph Estrada, called off peace talks with the MILF last year and mounted a military offensive. — With Roel Pareño