Brigadier Javed Cheema, an interior ministry spokesman, said: "There are at least 10 dead and 35 injured in the blast."
Aftab Sherpao, Pakistan's interior minister, said: "It appears to be a suicide attack, but we cannot say for sure."
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.
Dozens of shoes lay at the scene amid piles of shattered glass and the mangled remains of chairs and a motorcycle.
Sohail Rahman, Al Jazeera's correspondent in Islamabad, said: "It didn't look like it was a car bomb."
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 is expected to decide whether to allow or overturn the March 9 suspension of Chaudhry by Pervez Musharraf, Pakistan's president.
Chaudhry's defenders 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.