According to our correspondent in Moscow, the explosion occurred as a military convoy, carrying numerous Russian soldiers passed by. The incident occurred in Vladikavkaz, the regional capital of North Ossetia.
"Initial information was that a number of soldiers, lightly wounded, were transferred to a hospital", the correspondent said.
A woman, who was near the scene of the explosion, was killed. A number of buildings were also damaged.
Authorities have not pointed fingers at any suspects nor has anyone claimed responsibility for the explosion.
"Observers expect more explosions to occur with the presidential election due on 4 March 2004," the correspondent added.
Reuters news agency reported state security officials as saying initial signs pointed to "a terrorist act".
But a regional interior minister spokesman gave a conflicting account, saying the explosion was most likely caused by a gas container inside the car.
FSB and interior ministry investigators were working at the scene to try to establish the cause of the blast.
The military truck damaged in
blast being examined
Chechen separatists have frequently attacked military targets in and around their homeland where they have been battling Russian forces for a decade to win independence.
North Ossetia was the scene last August of an attack on a military hospital by a bomber driving a truck full of explosives. Fifty people were killed in that attack.