The blast occurred near Narayanpatna, about 75 km from Koraput, when the government jeep carrying two officials of the state Agriculture department was passing that way, they said.
The driver of the jeep was seriously injured and has been admitted to a hospital at Koraput.
Two other officials also sustained injuries. The officers were on their way to attend an agriculture fair at Narayanpatna from Jeypore when the mishap occurred. Police forces have rushed to the spot and investigations are currently on, they said.
Meanwhile, normal life was affected in three naxal-hit districts of Gajapati, Kandhamal and Rayagada amid disruption of vehicular traffic due to road blockade at several places by Maoists on the second day of their bandh today.
The Maoists had given a call for two-day bandh in the three districts of southern Orissa alleging fake encounters and police excesses.
Movement of vehicles, including passenger buses was hit in several areas in the region as the rebels blocked roads by felling a large number of trees in many places including Adaba, Aliganda and Mohana in Gajapati district, they said.
As bus operators chose not to ply their vehicles fearing attack by the ultras, road connectivity in the southern region remained disrupted.
While shops, markets and business establishments remained open in urban areas like district headquarter towns, shops downed their shutters in rural belts and remote areas in the region, police said.