Ambulances rushed to the scene on Kizilay square, a key commercial and transport hub close to the city's embassy area, where the blast reduced several vehicles including a bus to burnt-out wrecks.
The attack comes just weeks after the city was hit by a suicide car bombing on February 17 targeting the military that killed 29 people, claimed by a dissident faction of the outlawed Kurdistan Workers' Party (PKK).
"The blast was caused by a vehicle packed with explosives close to Kizilay square," an official statement said.
Medical sources told AFP the wounded had been taken to 10 different hospitals around the city, with a dozen said to be in a very serious condition.
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Turkey has been hit by a spate of deadly attacks since the middle of last year, most of them blamed on the Islamic State (IS) group, including a double suicide bombing in Ankara in October that left 103 people dead.
The Kurdistan Freedom Falcons (TAK), linked to the PKK, said it carried out the February bombing in Ankara as revenge for operations by the Turkish military in the southeast of the country and warned foreign tourists not to visit the country.
A two-year ceasefire between the government and Kurdish rebels collapsed in the middle of last year and since December security forces have been waging a major campaign against the PKK in the southeast of the country.
Today's attack came hours before curfews were due to take effect in two more towns in the southeast as a prelude to fresh military operations.
Authorities said restrictions would be slapped on Yuksekova, near the Iranian border, and Nusaybin, on the frontier with Syria, to "restore order and security" following an increase in "terrorist activity".