The blast occurred at what is thought to have been an unauthorised fireworks depot at Tultepec, 32 km (20 miles) north of the capital, Mexico City.

It left a big crater and reduced a two-block area to rubble. Red Cross workers at the scene told the BBC that more than 30 people were injured.

Many blocks away, shattered glass still covered the street and people who live as far as five kilometres (three miles) away reported hearing the blast.

Rescue workers expect to find more bodies

"It was like a bomb," said a resident living six blocks away.

Some residents, apparently fearful that the explosion would lead to a crackdown on illegal fireworks, blocked journalists trying to enter the affected area. They said a minor gas explosion had occurred and that there was nothing to see.

Gen. Francisco Fernandez Solis, general director of public safety, has reportedly confirmed that the explosion was of gunpowder.

"The explosion was started by a gas tank leak, which spread and caused an explosion in products used to make fireworks," he was quoted as saying.

Red Cross workers said police were working on the possibility of human error. Television footage showed piles of unprotected gunpowder on ground close to the scene.

Tultepec is known for its fireworks, and many residents produce them illegally in their homes.