The incident happened yesterday in an area of Karen state near the Thai border, which residents say has been rattled by fighting in recent weeks between troops and a rebel splinter group representing the ethnic Karen minority.
The latest round of talks aimed at securing a nationwide ceasefire in a nation beset by ethnic insurgencies ended in deadlock late last month -- leaving the government still short of its target of reaching peace before elections next year.
"Three men and a 12-year old boy were killed. Another two women and eight more men -- including an abbot from a nearby monastery -- were wounded," the policeman said.
A local hospital official, also asking not to be named, confirmed the death toll but put the number of wounded at eight.
It was not clear who fired the weapon. Witnesses told AFP a mortar bomb struck a group of passengers who had left their vehicles which were blocked by a broken-down lorry.
Neither side was immediately available for comment but the army has a position near the road.
There have been clashes in Karen state for more than a fortnight after the DKBA apparently baulked at the movement of soldiers in the tense area -- even though the group signed a peace accord with the army more than a decade ago.
Efforts to negotiate a nationwide end to decades of civil conflicts in minority borderlands have been a government priority.
The Karen National Union has joined peace talks and a new round is scheduled for late October.
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