A bomb blast killed one man on Sunday in Dhaka as violent clashes broke out between police and hundreds of opposition party activists gathered to mark Bangladesh's 40 years of independence, police said.

Police used batons and fired tear gas at the rioting activists who hurled small bombs, torched a police van and four buses as clashes spread across the city, halting rush-hour traffic, Dhaka police spokesman Masud Ahmed said.

The clashes erupted in the morning, as police dispersed supporters of the main opposition Bangladesh Nationalist Party (BNP) and its Islamist allies, coming together in central Dhaka.

"A man aged around 25 was killed on the spot after a small bomb he appeared to have carried exploded. We are investigating the incident," police chief at Motijheel commercial district Tofazzal Hossain told AFP.

He said the victim had been entangled in a barb-wire fence when was trying to cross a road in front of the Dhaka Stock Exchange.

It had not been confirmed whether the man was an opposition activist or he was trying to flee the clashes between police and opposition supporters.

However, BNP spokesman Rizvi Ahmed said the young man was an activist for the party and blamed police for the death.

"Police attacked thousands of our activists coming from all parts of the country. They wanted to foil our victory day programme in which the leader of the opposition is to honour the country's freedom fighters," he said.

A trader also suffered serious burns on his legs in the explosion. "We fell down when bombs were thrown," he told private ATN News television channel.

Police said BNP activists armed with small bombs, bricks and sticks also clashed with law-enforcing agencies near the Dhaka University area.

"They threw at least seven small bombs at us. But no one was injured," Rezaul Karim, head of one police station said. Police rounded up nearly 250 opposition activists, police duty officers at four stations told AFP.

Bangladesh became an independent nation after a bloody nine month battle with Pakistan that ended 40 years ago on December 16, 1971.

The South Asian nation has a history of political instability and the BNP and its allies have recently held a series of strikes in a new wave of unrest.