At least five people were killed and 20 injured in the explosion, according to Lebanon’s health ministry.
Smoke billowed from the scene in footage broadcast on Hezbollah’s Al-Manar TV, which showed firefighters scrambling to extinguish several blazing cars. At least one building’s facade appeared to have been badly damaged.
The official National News Agency reported that the explosion in the highly populated neighbourhood of Haret Hreik was caused by an explosives-packed four-wheel-drive vehicle.
Escalating violence in capital
The Lebanese capital has been hit by a series of bombs in recent months, including one last week that killed a former minister and political adversary of Hezbollah.
In November, another 25 people were killed by suicide bombers at the Iranian embassy in southern Beirut, and explosions have also hit other nearby Hezbollah districts and Sunni mosques in the northern city of Tripoli.
Sectarian tensions in Lebanon have mounted in recent months due to the conflict in neighbouringSyria. Hezbollah has sent fighters to Syria to join the forces of President Bashar al-Assad, who is from the Alawite sect of Shiite Islam, while Sunni Muslims from Lebanon have gone to Syria to fight alongside the rebels trying to topple him.