According to early varying reports, the blast was centred on Government buildings - although windows were also shattered in three or four other buildings nearby.
The number of fatalities is not yet known although pictures show at least two dead bodies.
Several people have reportedly been injured from flying glass.
The cause of the blast is not yet known but the tangled wreckage of a car was seen outside one building.
Scene of the blast in Norway this afternoon
Onlookers gather at a distance to watch in horror as the smoke fills the streets
The Prime Minister Jens Stoltenberg was not in the city at the time and is unharmed, it has been reported.
Moments after the blast smoke filled the street and witnesses reported seeing a young man with a bleeding leg being helped away from the area.
Fortunately, it was a public holiday and the offices were less busy than a normal weekday.
The cause of the blast is not yet known, although there is early speculation it could be a terrorist attack.
Norway has about 400 troops currently serving in Afghanistan.
Fortunately, it is a public holiday in Norway and the offices are less busy than a normal weekday
Eyewitness Craig Barnes was behind the Government building that was struck today.
He told Sky News: 'I'm still shocked, I can't believe it. I've got no words, I'm shaken up. Quite a few people are injured. It has shocked everyone and its a major holiday here. Everyone leaves here for two weeks from today, it's completely dead.
Smoke filled the street and witnesses reported seeing a young man with a bleeding leg being helped away from the area
Smoke is seen pouring from a Government building and paramedics are seen rushing to help a casualty
Shards of glass lay strewn on the pavement following the blast. It is not known how many people are injured ( dailymail.co.uk )
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