Television pictures showed shards of glass and piles of debris outside Shiraz's Mosque of the Martyrs as large crowds waited for news of relatives.
The death toll is expected to rise due to the severity of some people's injuries, officials said.'No bomb'
"Initial surveys have proved that no bomb was involved and therefore there have been other probable causes," Ebrahim Azizi, the governor of Fars province, was quoted as saying by the state-run IRNA news agency.
Earlier, the Fars news agency, citing city officials had reported that "a powerful bomb" had exploded.
Al Jazeera's Alireza Ronaghi in Tehran said that the Iranian government may be being cautious about the cause of the blast with the country just two weeks away from the second round of elections.
"What we see here is that some of the officials have expressed concern about the nature of this explosion," he reported.
"We have heard the speaker of the parliament saying today that government officials and the authorities need to investigate deeply and properly what this incident was."
Jaber Baneshi, the prosecutor in Shiraz, told IRNA that "a judicial probe has been launched to determine the cause of the explosion and the possibility of sabotage".'Package planted'
However, Mohammad Anjavinejad, the preacher who was addressing the crowd at the mosque, reportedly cast doubt on the accident theory, saying that the force of the blast and the presence of an individual who planted a package in the building suggested otherwise.
|"Some parties are trying to show this was an accident to portray the city as safe. But it is their duty to implement security"|
Mohammad Anjavinejad, preacher
"Some parties are trying to show this was an accident to portray the city as safe. But it is their duty to implement security," he told the Alef news website.