Explosion on asylum boat off Australia, 3 dead

(Adds police comments, background)

CANBERRA, April 16 (Reuters) - An explosion occurred on a boat carrying around 49 asylum seekers to Australia's Christmas Island, possibly killing three people and injuring dozens more, police said on Thursday.

The boat, which was believed to be carrying 49 people from Afghanistan, had been intercepted by Australian authorities and was being towed to Darwin when the explosion occurred, Western Australia state police Sergeant Greg Lambert said.

"It is believed an explosion has occurred in the engine compartment of a vessel," said Lambert. "It is believed three people have been killed, two are missing and others are injured."

The boat was intercepted near Ashmore Island off the northwest coast of Western Australia on Wednesday.

Thirteen boats carrying asylum-seekers have been discovered in Australian waters since the centre-left government softened Canberra's treatment of asylum-seekers last July.

People-smuggling to Australia peaked in 2001 when more than 1,200 people arrived, mostly from the Middle East and organised by professional people-smuggling rings.

Immigration advocates said there had been a 12 percent increase worldwide in asylum-seeker numbers during 2008, and Australia was seeing only a fraction of that, with numbers last year up from 3,970 in 2007 to 4,750. (Reporting by Rob Taylor; Editing by Michael Perry)