"The army has informed us that five of their men are dead and one is seriously injured," said Srinagar police chief Syed Ahmed of Wednesday's explosion.
"Over a dozen people are injured," he added.
The explosion was caused by a car bomb that targeted two passing security forces vehicles, an officer from a paramilitary security force said.
Among the injured were civilians, said the officer, who asked not to be identified.
Ahmed said preliminary investigations indicated a car laden with explosives was driven into the back of an army vehicle.
Television footage showed army personnel loading the bodies of soldiers into waiting vans. The area was strewn with debris from a vehicle.
The blast, which partially damaged a four-storey office building, took place near a high-security zone where several ministers from the Jammu and Kashmir state government live.
The explosion also damaged a nearby shopping centre, shattering shop windows.
No one immediately claimed responsibility for the blast.
Kashmir is in the grip of an almost 16-year-old separatist movement by Islamic guerrillas against Indian rule in the disputed state, which has cost about 44,000 lives according to an official count.