The blast hit a police traffic control building on a highway leading southeast from Diyarbakir to the city of Batman, killing the seven, a Turkish official said, confirming media reports and asking not to be named.
The local governor's office earlier said in a statement that 25 people were wounded including five police officers. One of those killed was a child.
A previous toll had said six people were killed.
Locals were also inspecting the massive trench left in the ground by the bomb.
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The latest bombing came after at least eight people, mostly civilians, were killed on Wednesday in two separate attacks blamed on PKK militants in Turkey's southeast.
It also came on the day seen as marking the 32nd anniversary of the launch of the PKK's armed rebellion by radical Kurdish nationalist Marxists led by their now-jailed leader Abdullah Ocalan.
The government has responded with deadly military operations against the group in southeast Turkey as well as air raids on its strongholds in northern Iraq.
The PKK has kept up attacks after the failed coup of July 15 that sought to oust President Recep Tayyip Erdogan, which authorities blamed on US-based preacher Fethullah Gulen.
Despite the attempted putsch, the government has vowed there will be no let-up in the fight against the PKK.
There has been no suggestion that the PKK was behind the coup and Gulen is believed to have vehemently opposed peace talks with the group in the past.
But some officials have alleged the PKK has helped Gulen supporters flee the post-coup crackdown into northern Iraq or Europe, sometimes in exchange for information about the Turkish intelligence services.
Meanwhile, three soldiers serving on Imrali prison island where Ocalan has been held since his capture in 1999 have also been detained as part of the investigation into the coup, the state-run Anadolu news agency said.