The incident took place this afternoon at Eid Gah locality in Bhaderwah town, Sub-Divisional Police Officer (SDPO) Sardar Sajjad Ahmed Khan said.
On hearing the sound of the explosion, locals rushed to the spot and tried to extinguish the fire, he said.
On getting information, police and fire fighters rushed to the spot and rescued the injured, Khan said.
Initially the injured were shifted to Sub-District Hospital (SDH), Bhaderwah from where they were airlifted by an Air Force chopper to Government Medical College (GMC) hospital in Jammu, he added.