At least eight people were feared killed and five others injured in a blast on Monday  outside the Danish Embassy, located in a high-security area in the heart of the Pakistani capital.

Reports said the explosive device was hidden in a car parked near the Danish Embassy in the upmarket, where several embassies are located. A number of top diplomats from various countries live in the area.

The residence of Indian High Commissioner is also located in the same area but at some distance from the site of blast.

The blast caused extensive damage to the private building in which the Danish Embassy is located. About 30 cars parked in the vicinity were completely destroyed by the impact of the explosion, which caused a massive crater and even rattled the windows of houses located kilometres away.

Initial reports said most of the dead were Pakistani nationals, including guards deployed at the embassy and nearby private residences. Several Western embassies located in the area were evacuated and security was tightened across Islamabad.

No group claimed responsibility for the blast but security officials said the attack could be linked to the blasphemous cartoons of the Prophet Mohammed published in Danish newspapers.

Reports had suggested that the Danish Embassy had been issued several warnings about security threats. A committee of the Senate or upper house of parliament had recently recommended that all embassies should be shifted to the high-security Diplomatic Enclave near the Foreign Office.