Opposition party activists, police officers and bystanders were believed to be among the victims.
Chaudhry was said to have been at least 5km away at the time but he made a brief appearance at the scene later.
The worst of the damage was around the entrance to a marquee, which had been hired by the Islamabad District Bar Association for the speech by Chaudhry.
Al Jazeera's Matt McClure, reporting from the scene in Islamabad, said the smell of burnt flesh was in the air and bloodstains and debris were on the ground as police collected evidence.
The blast follows a string of suicide attacks in northwest Pakistan which have killed more than 70 people, apparently in retaliation for the government's deadly storming of the Red mosque in Islamabad.
It also came days before the Supreme Court was expected to decide whether to allow or overturn the March 9 suspension of Chaudhry by Pervez Musharraf, Pakistan's president.
|Chaudhry made a brief appearance |
at the scene of the blast [Reuters]
Musharraf suspended him for alleged misconduct, including nepotism and securing unwarranted privileges.
Musharraf condemned the blast as a "terrorist act".
But Chaudhry's supporters accused the authorities of being behind the latest mayhem in the capital.
They say he was ousted because he may have stood in the way of Musharraf's bid to get re-elected by the outgoing parliament this year as president while also staying on as army chief, in defiance of the constitution.
Chaudhry has denied the charges and challenged his suspension.