The agency, citing civil defence figures, said the blast was only 200 metres from the headquarters of the Christian party, the Phalange, which is hostile to the regime of President Bashar al-Assad in neighbouring Syria.

The bombing comes at a time of high tensions and divisions in Lebanon as a result of the conflict in Syria.

An AFP photographer saw two apartment buildings devastated by the bombing in a narrow street off Sassine Square in Ashrafieh. One building was still ablaze as Red Cross workers evacuated bloodied casualties.

Georges Kettaneh, in charge of the Red Cross operation, said at least 37 people were wounded.

Balconies were torn off by the force of the blast, windows shattered and cars crushed by falling masonry.

"We heard a powerful explosion. The earth shook under our feet," said Roland, 19, among a large crowd of army, rescue workers and onlookers.

Interior Minister Marwan Sharbel was also at the scene of the first car bombing in Beirut since January 25, 2008, when Lebanon's top anti-terrorism investigator was slain along with three other people.

Relatives of employees at BEMO bank, whose windows were broken, dashed to the area to look for their children. "Where is Pierre?" one man cried, as a young woman searched for her mother in the rubble.

The most high-profile car bombing since Lebanon's 1975-1990 civil war took place on February 14, 2005 when a massive blast killed former premier Rafiq Hariri and 22 other people as his motorcade drove along the waterfront.