Elite police commandos and detectives stumbled on the explosives which included some 100 detonators from a make-shift warehouse near the Wilpattu national park, police said.
"Following information received by the CID (Criminal Investigations Department), they found 100 kilos (220 pounds) of high explosives and 100 detonators," police said in a statement.
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Official sources said the discovery was made during investigations into recent hate attacks against Buddha statues elsewhere in the country in an apparent attempt to spark tensions between majority Buddhists and minority Muslims.
"The information we have at the moment is that a radicalised local group of militants are behind the explosives seized on Thursday," an official said asking not to be named.
"We are trying to see if they had any links with militants abroad."
There have been no attacks in Sri Lanka linked to foreign militant groups despite local media reports that a 37-year-old Sri Lankan had been killed in Syria in 2015 while fighting for Islamic State (IS) group.
The latest discovery of explosives in the north-west of the island on Thursday is one of the biggest finds since the country ended its decades-long war against Tamil separatists in 2009.
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There has been sporadic violence against minority Muslims, and several Buddhist monks and their followers have been arrested for instigating inter-communal violence.
In Sri Lanka Muslims are considered an ethnic group. Almost all Buddhists in Sri Lanka are from the majority Sinhalese community.
Sri Lanka declared a 12-day nation-wide state of emergency in May last year following inter-communal riots led by Sinhalese mobs in the central district of Kandy where three people were killed and hundreds of shops and homes were destroyed.
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