Spanish media reports said the explosion took place in a building near a nursing home - and videos and images shared on social media showed rubble scattered in the street.

"We didn't know where the sound came from. We all thought it was from the school. We went up the stairs to the top of our building and we could see the structure of the building and lots of grey smoke," a witness told the AP news agency.

The explosion happened in Toledo street. Video on social media showed a number of wrecked cars and debris strewn in the road.

According to TVE, several people have been hurt, while Telemadrid is reporting that at least one person is trapped.

Emergency services could not immediately confirm if there had been injuries.

A police spokeswoman said the area was being evacuated but could not confirm the cause of the explosion.

Government sources have been quoted by Spanish media as saying it may have been a gas leak.