Several women and children were among those injured when the blast occurred in the densely populated Hussain Agahi Chowk area of Multan this morning.
Officials said six persons succumbed to their injuries in hospital.
The son and daughter of Muhammad Zulfiqar, who had stored the explosive materials in the building, were among the dead, officials said.
Police registered a case against Zulfiqar and his wife Parveen.
The blast severely damaged the four-storey building in which the explosive materials had been stored. It also triggered a massive fire while a nearby three-storey building collapsed.
Fire fighters were unable to extinguish the blaze for several hours due to strong winds, officials said. Rescue service officials said more persons could be trapped in the debris.
Footage on television showed people digging through the rubble with their hands as a cloud of dust hung over the area.
Authorities evacuated the area due to fears that the four-storey building might collapse.
A police official was suspended for failing to act on complaints that explosive materials were being stored in the area.
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