A woman and a baby are reported among the dead. Rescuers are searching through the rubble at the scene in Cinar district, Diyarbakir province.
Officials blamed the blast on Kurdistan Worker's Party (PKK) militants, who are active in the mainly Kurdish province.
No group has so far said it carried out the attack.
Meanwhile, at least two people are reported killed in a series of blasts in the Indonesian capital, Jakarta, with gunfire breaking out afterwards.
The explosions happened outside the Sarinah shopping centre, close to the presidential palace and UN offices, say reports.
A UN official close to the scene, Jeremy Douglas, told the BBC that gunfire was ongoing.
(Inputs from BBC)