Former African National Congress guerilla Walter Smiles, in his testimony to the commission hearing in Kimberley on Tuesday, publicly confessed for the first time to throwing the grenade.
Two other men convicted of being responsible for the blast are currently serving 12-year jail terms.
Smiles said he attacked the consulate during a protest march by the ANC Youth League on the orders of regional Umkhonto we Sizwe commander Lawrence Mbatha.
The ANC has suggested the grenade was thrown at the protesters by someone outside its ranks.
The commission also heard how police allegedly fabricated witness statements and suppressed evidence to ensure the conviction of suspects Sipho Mbaqa and Nkosinathi Nkohla for the blast.
Although Smiles came forward during their trial to make a confession, police allegedly turned him away, saying he would only complicate matters if he made a statement.
Smiles told the commission Mbatha had handed him a grenade wrapped in a piece of paper and told him to throw it when the marchers handed over the the last of three memorandums to consulate officials.
The ANC Youth League march was to protest against police assaults on students at the University of Bophutatswana.
Smiles said: "When the third petition was being handed over, I threw the grenade. I had no experience in this kind of thing. If I had had more experience nobody would have been hurt."
He said he intended applying for amnesty from the commission and asked that Mbaqa and Nkohla be released from prison as they were both innocent.
His appeal was met by wild applause from the audience in Kimberley's Town Hall, the venue of the two-day hearings which ended on Tuesday.
"I also would like to apologise to the deceased's family. I should not have done it," he said.
However, Smiles' confession caused some confusion among reporters who had copies of a written statement he had made to commission officials earlier. In the statement he denied all knowledge of the grenade attack or any personal involvement.
Another witness to contradict his written statement was Thembinkosi Ngqele. In his statement he said he had seen Mbaqa hand a grenade to Nkohla during the march and had noticed the latter's hand moving "as if he was throwing a cricket ball".
Ngqele provided much of the State's evidence against the two during their trial.
When he took the stand on Tuesday, however, he claimed police had tortured him into making a false statement at the trial.
Truth commissioner Yasmin Sooka explained away the apparent contradictions at a media briefing later, where commissioners were tackled on the glaring discrepancies between the witnesses' verbal and written statements.
Sooka was also asked whether the commission did not have a duty to ensure that false impressions were not created in the hearings, given the fact that they were open to the public and being broadcast on radio and television.
"This is not a court of law. We are not going to find people guilty or not guilty," she said.
The main purpose of the hearings was to allow victims to tell their stories as they saw fit.
"We do some basic corroboration of the stories beforehand, enough to ensure that a person is not telling lies."
After the hearings, however, the testimony would be rigorously investigated by the commission's investigative unit.
Nevertheless, the evidence presented at Tuesday's hearing indicated that the court may have been misled in convicting Mbaqa and Nkosinathi, she added.