Turkish Prime Minister Ahmet Davutoglu has convened an emergency security meeting of key ministers and officials after a suspected attack on Istanbul's tourist hub of Sultanahmet left 10 people dead.
Those taking part in the meeting include the powerful Interior Minister Efkan Ala and spy chief Hakan Fidan, the Anatolia news agency said.
Fifteen were also wounded in the attack, officials said.
Turkey's Dogan news agency says at least six Germans, one Norwegian and one Peruvian are among the injured in the explosion.
A spokeswoman for the Norwegian Foreign Ministry in Oslo said the office is working with the embassy in Turkey to check media reports of Norwegian citizens among the wounded.
Seoul's Foreign Ministry also told reporters via text message that one South Korean had a slight finger injury after the blast.
Turkey is on edge after a series of deadly attacks blamed on the Islamic State jihadist group including a double suicide bombing in the capital Ankara in October that left 103 people dead.
"Terrorist links are suspected," a Turkish official told AFP of Tuesday's blast, asking not to be named.
#Sultanahmet meydan patlama pic.twitter.com/g33eSB09nZ
— HAKAN DOGAN (@HAKKODO) January 12, 2016
Ambulances and police were despatched to Sultanahmet, the city's main tourist hub, which is home to world-famous monuments including the Blue Mosque and the Hagia Sophia.
"Investigations into the cause of the explosion, the type of explosion and perpetrator or perpetrators are under way," the Istanbul governor's office said in a statement quoted by the Dogan news agency.
Images published by Dogan showed several apparently dead bodies lying on the ground.
Media reports said the authorities were studying the possibility the blast was caused by a suicide bomber but there was no official confirmation.
The explosion was powerful enough to be heard in adjacent neighbourhoods, witnesses told AFP.
Police cordoned off the area to shocked passers-by and tourists and the nearby tram service has been halted.
"The explosion was so loud, the ground shook. there was a very heavy smell that burned my nose," a German tourist named Caroline told AFP.
"I started running away with my daughter. We went into a nearby building and stayed there for half an hour. It was really scary," she added.
Media reports said the blast took place at 0820 GMT around the Obelisk of Theodosius, a monument from ancient Egypt which was re-erected by the Roman Emperor Theodosius and is one of the city's most eye-catching monuments.
Turkey is on alert after 103 people were killed on October 10 when two suicide bombers blew themselves up in a crowd of peace activists in Ankara, the bloodiest attack in the country's modern history.
That attack was blamed on Islamic State (IS) jihadists, as were two other deadly bombings in the country's Kurdish-dominated southeast earlier in the year.
Turkish authorities have in recent weeks detained several suspected IS members, with officials saying they were planning attacks in Istanbul.
But Turkey is also waging an all-out assault on the outlawed Kurdistan Workers' Party (PKK) which has staged dozens of deadly attacks against members of the security forces in the southeast.
The PKK launched an insurgency against the Turkish state in 1984, initially fighting for Kurdish independence although now more for greater autonomy and rights for the country's largest ethnic minority.
The conflict, which has left tens of thousands of people dead, looked like it could be nearing a resolution until an uneasy truce was shattered in July.
A Kurdish splinter group, the Freedom Falcons of Kurdistan (TAK), claimed a mortar attack on Istanbul's second international airport on December 23 which killed a female cleaner and damaged several planes.
Meanwhile the banned ultra-left Revolutionary People's Liberation Party-Front (DHKP-C) has also staged a string of usually small-scale attacks in Istanbul over the last months.
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