At least two people were killed and 26 injured in a blast in Pan Mandi in Lahore's Anarkali area, officials said on Thursday.
Earlier, a police spokesperson said three persons were killed in the blast, but Lahore Capital City Police Officer spokesperson Mubashir Hussain later confirmed two casualties.
Police spokesperson Rana Arif also told Dawn.com that the blast was caused by a bomb "planted" in a motorcycle but did not provide further details.
The blast was so powerful that it damaged several shops near Lahore's famous Anarkali bazaar, witnesses said. TV footage showed burning motorcycles in a crowded bazaar, as the wounded cried for help.
Speaking to reporters at the scene of the incident, Lahore Police DIG Operations Abid Khan said that the impact of the blast had left behind a crater which suggested that it was caused by a bomb.
"Our technical team is collecting evidence. We will reach a conclusion on the basis of their analysis," he said.
Lahore Deputy Commissioner Umer Sher Chattha, meanwhile, said that the blast took place in the last lane of Anarkali bazaar, close to Circular Road. He said the explosive material was planted in a motorcycle which was parked outside a bank in the area.
He also confirmed that three people had died in the incident, adding that the nature of the blast would be determined by the Forensic Science Agency, the Safe City Authority and the bomb disposal squad.
The DC said that two of the injured were in critical condition while the wounded were being treated at Mayo Hospital.
Punjab Chief Minister Usman Buzdar also took notice of the incident and directed the inspector general of police to submit a report in this regard. He also directed officials to provide the injured with the best possible medical facilities.
In a separate statement, Buzdar condemned the blast and said that those responsible would be arrested and justice would be ensured. "This incident is aimed at sabotaging the atmosphere of law and order. Those responsible for the blast will not be able to escape the clutches of the law," he said.
Shortly after the incident occurred, the Lahore deputy commissioner directed the civil defence officer to deploy a bomb disposal squad to the area and said that a complete and thorough sweep of the area should be conducted.
Politicians condemn incident
Prime Minister Imran Khan condemned the bombing in a statement, urging authorities to provide the best possible medical facilities to those who were wounded. He also sought a report from the Punjab government.
PML-N Vice President Maryam Nawaz said that a blast in an area like Anarkali was incredibly sad and disturbing. She prayed for those killed and injured in the incident.
PPP's Sherry Rehman said she was "shocked and sorry" to hear about the blast in Lahore.
PML-N President Shehbaz Sharif expressed grief over the incident and extended condolences to the families of those killed in the blast.
"I am deeply saddened by the loss of precious lives in a blast in Lahore's historical and lively area of Anarkali," he tweeted.
He added that an incident of terrorism in Lahore, following one in Islamabad was not a good omen for the country. He also prayed for the complete recovery of those injured in the blast.
Interior Minister Sheikh Rashid Ahmed also condemned the incident and expressed grief over the lives lost. He said that he had sought a report from the Punjab government.
Special Assistant to the Prime Minister for Political Communication Dr Shahbaz Gill said that the enemy takes such steps to spread chaos and uncertainty in an effort to damage the economy. He urged TV channels to report the incident and refrain from indulging in sensationalism.
Additional input from AP