The city governor Muammar Guler said at least two men armed with automatic guns stormed the building late on Tuesday night and one of them set off explosives strapped to his body.
Guler said one of the human bombers was among the dead. The other victim was said to be a waiter working in the building.
The second assailant was badly wounded in the explosion and was kept in hospital with a severed arm and injuries to his abdomen.
The attackers also threw hand grenades and fired shots inside the building. Police cordoned off the street where the building is located and bomb disposal experts were at the site.
"No one has claimed responsibility for the attack. We have no organisation name either," the governor said.
There was no immediate word on the motive for the attack as well.
Footage broadcast on CNN-Turk news channel showed the wounded assailant, with blood on his face, saying: "Damn Israel, long live ... " as he was carried into hospital.
Paramedics attend to one of the
six people injured in the blast
Tuesday's attack came nearly four months after two waves of car bombings in Istanbul in November which killed 63 people and wounded hundreds.
Asked whether the two bombings could be linked, Guler said he believed there was no connection in view of the methods and bombs used.
Milliyet daily quoted security experts as saying the pipe-style bomb was of the kind typically used by another Turkish group called IBDA-C (the Islamic Great Eastern Raiders' Front).
IBDA-C surfaced in the mid-1990s with a series of bomb attacks on nightclubs and churches in Istanbul and claimed responsibility for the November blasts, although Turkish authorities linked them to al-Qaida.
The authorities later claimed to have crushed a local group with al-Qaida ties, after a string of arrests.
After the November attacks, the semi-official Anadolu Ajansi news agency received a phone call from a man to say they had been "the joint work of al-Qaida and IBDA-C".
"Damn Israel, long live ..."
"Our attacks on the centres of international freemasonry will continue," he is reported to have said.
Two weeks ago, Turkish prosecutors indicted 69 people over the bombings. It is not yet clear when the trial will start.
The Masons, a secretive society that traces its roots to medieval craft associations in Britain, are active in this predominantly Muslim country where the powerful army ensures a strict secularism in politics.
There are an estimated five or six million Masons worldwide, pledged, they claim, to the principles of brotherliness, charity and mutual aid.
But critics charge them with a subversive agenda of promoting secular and satanic values and seeking to dominate the world through their secret organisations.
According to some experts, Jews were prominent in Freemasonry in Turkey at the turn of the 20th century and the downfall of the Ottoman Caliphate, the last Muslim empire, based in Istanbul until its demise in 1924.
They also claim the Jewish founding fathers of Zionism belonged to this occult organisation and used its institutions to plot the seizure of Palestine from its native inhabitants.