The blast occurred at around 3:24pm local time in a cafe on al-Nasser Street in the al-Marjah district, near the Palace of Justice, Syrian state media reported.
Authorities said the explosion was caused by an explosive device. Footage from the scene showed extensive damage to the cafe, with bloodstains visible across the floor.
Syrian authorities have launched an investigation and are reviewing surveillance footage from government and private security cameras in the area to determine those responsible.
Security forces initially sealed off the area over fears of a secondary explosion before beginning evidence collection.
Officials have not yet identified the perpetrators but said investigations are focused on possible sleeper cells seeking to destabilise the country s new government.
Residents rushed to help the injured before emergency services arrived at the scene.
The Palace of Justice, located about 40 metres from the blast site, has recently hosted trials of senior officials from the former Assad government, including former Grand Mufti Ahmad Badr al-Din Hassoun earlier this week.
Damascus Governor Maher Marwan said the city s security situation had improved in recent months but warned that attempts to undermine stability continued.
"The coming hours will reveal the truth, and those responsible for shedding Syrian blood will be held accountable," he said.
Authorities warned that the death toll could rise as several of the injured remain in critical condition.
