The area is surrounded by neighbourhoods that are strongholds of the Lebanese Shiite movement Hezbollah and have been targeted in multiple bomb attacks killing civilians.
A security source confirmed that an explosion hit the Bir Hassan neighbourhood and said at least two people were dead and several more were injured.
There were no immediate details on the nature of the explosion, which sent a large plume of smoke over the area.
Lebanese television crews at the scene broadcast footage of widespread destruction, with emergency teams carrying wounded people away from a charred street strewn with rubble.