"There was a blast on Mall Road in Rawalpindi. We are trying to get details from our people on the ground. Casualties are feared," Mohammed Akhlaq, a police officer, told the AFP news agency.
"It was a huge blast. I saw smoke rising from one of the buildings. I sped up to escape," Sajid Khan, a witness, said.
More than 100 people were killed after a huge car bomb struck a busy market in Peshawar last week.
A surge in violence has hit Pakistan in recent weeks, leaving more than 300 people dead last month alone as the military launches a major offensive against the Tehreek-e-Taliban (TTP).