The blast at the Roman Catholic church was the first such attack in Nepal [EPA]
Police said the bomb ripped through the Church of the Assumption in the town of Lalitpur, south of Kathmandu, the capital, on Saturday.
A bomb explosion has killed two people and wounded at least 12 others at a church in Nepal, hours before the country's parliament was to elect a new prime minister.
"The wounded people have been rushed to a local hospital and we are investigating," Kedarman Singh Bhandari, the superintendent of police, said.
A witness who was attending the church service said a bag was left lying on the floor, the Associated Press reported.
"Someone moved the bag to make some space and it just exploded with a loud noise," the witness said.
Hindu group
Navin Ghimire, the home ministry spokesman, said that a little-known Hindu extremist group, the National Defence Army, left a note found at the scene.
The National Defence Army, which says it is fighting to restore the nation's Hindu monarchy abolished in 2008, has previously claimed responsibility for the killing of a missionary in eastern Nepal last July.
"This is the saddest day in the history of Nepali Christians. Never before has there been such an attack on the church in Nepal" Tirtha Thapa,
a Christian leader
The group also said it bombed a mosque in the east of the country last year, killing two people.About 500 people were attending a service at the time of the blast.
Ram Brish Chaudhary told the AFP news agency: "A 15-year old student, Celestina Joseph, and 30-year-old Pabitra Paitri died in the bomb blast. Five of the injured are in serious condition."
"Security has been increased and an investigation is going on."
It was the first such attack on a Christian church in Nepal, where most of the population is Hindu or Buddhist.
"This is the saddest day in the history of Nepali Christians. Never before has there been such an attack on the church in Nepal," Tirtha Thapa, a Christian leader, said.
"We deeply grieve with the families of the dead," he said.
Churches in Nepal hold services on Saturdays because it is a public holiday when schools and offices are closed.
Police reports state that a bomb blast in a church in Nepal on Saturday has killed two people and injured at least a dozen more. The attack comes just hours before the national parliament was due to elect a new prime minister.

The bomb detonated in the Church of the Assumption in the town of Lalitpur, located south of Nepal's capital of Kathmandu. The explosion occurred during the church's weekly function. Around 150 people were in the church at the time of the explosion.

"The wounded people have been rushed to a local hospital and we are investigating," police superintendent Kedarman Singh Bhandari said.

"A 15-year old student, Celestina Joseph, and 30-year-old Pabitra Paitri died in the bomb blast. Five of the injured are in serious condition," Ram Brish Chaudhary said to the Agence France Presse news agency. "Security has been increased and an investigation is going on."

According to the Nepalese home ministry spokesman, Navin Ghimire, the National Defence Army, an obscure Hindu extremist group, left a message at the scene of the disaster, assuming responsibility for the explosion. The group says it wants to return Nepal's Hindu monarchy back to power after it was abolished last year. It has taken responsibility for the killing of a missionary in July of last year.

This is the first bomb attack on a Christian church in Nepal. The country's population is predominantly either Buddhist or Hindu.