The Lebanese health ministry has confirmed that five people have died and at least 20 have been injured.
Television footage showed the twisted and blackened remains of several cars being doused with hoses by emergency services.
The blast also tore off the facades of several nearby buildings.
Channel 4 News understands the blast site is near the al-Zawati Restaurant, in an area that previously contained Hezbollah’s security zone and in which the HQ of Hezbollah’s politburo is currently located, and near the house of the deputy of the secretary general, Sheikh Naiim Kassem.
Conflict in neighbouring Syria has polarised Lebanon and ratcheted up sectarian tensions.
Hezbollah has sent fighters to Syria to join the forces of President Bashar al-Assad, who is from the Alawite offshoot of Shi’ite Islam, while Sunni Muslim fighters have gone to Syria to fight for rebels trying to topple him.