Police commander Faustino Mendoza said a device packed with three kilograms of dynamite exploded late yesterday, killing bystanders.
"We have four people killed and nine injured," said Mendoza, adding that the blast occurred in a street near the scene of an even deadlier explosion on Saturday that killed eight people.
Initially, a government minister said that explosion was likely caused by a street vendor's gas cylinder.
Following the second blast, army units patrolled the streets of the city and regional Governor Victor Hugo Vasquez said: "We are sure that this is a criminal attack."
Three suspects have been arrested, Interior Minister Carlos Romero said, without giving further details.
Traces of ANFO, an industrial explosive widely used in the mining industry, were also found at the site of the latest blast, authorities said.
President Evo Morales, in a statement on Twitter, said the South American country had been plunged into mourning.
"Very saddened and concerned because we have a tragedy again, and the death of innocent bystanders in Oruro has our country in mourning after another explosion," he wrote.
Thousands of people had danced along a four-kilometre circuit of streets during the festivities on Tuesday.
Today, the city's university and schools located near the incidents remained closed.
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