Attackers killed four people and wounded five as they watched television at the home of a ruling party member, said witnesses and a local official.
“The attackers came from the upper hills in a rural area and threw a hand grenade in a crowd” watching the UEFA Champions League final, said Abraham Bampoye, local administrator of Kanyosha district south of the capital Bujumbura.
The attackers sang gospel songs associated with fighters of the former rebel group, the Forces for National Liberation (FNL), Kanyosha resident Saidi Sahinguvu told Reuters.
“After the grenade explosion, I heard much gunfire. I think it is the police and soldiers on night patrol who were trying to intervene,” he said.
A police spokesman declined to comment.
The attack came after armed men clashed on Thursday with government soldiers in former FNL rural strongholds, intensifying fears of a fresh rebellion.
Three soldiers were reported killed in the clashes.
Former rebel leader and FNL boss, Agathon Rwasa, is in hiding, saying he fears he will be arrested by the government which has accused him of planning a new insurgency.
Authorities in the central African country believe that Rwasa is in neighbouring Democratic Republic of Congo.
Burundi has enjoyed relative peace since the FNL laid down its weapons and joined the government in 2009 following two decades of insurgency.
Rwasa was a presidential candidate in Burundi’s 2010 elections but later withdrew from the race, accusing the ruling CNDD-FDD party of rigging the votes.