After sealing off the area in the southeastern region of Batman, experts transported the abandoned car to an open space and set off a controlled detonation, the private Dogan news agency reported.
But the blast unleashed a huge ball of fire and smoke, with video footage by Dogan showing bystanders running in panic.
The powerful explosion shattered the windows of nearby buildings and one person was wounded by broken glass, Dogan said.
Police were alerted after a car rental company's owner called to report a suspicious person who had hired a vehicle.
The suspect said he was renting the car to travel to Hasankeyf, a major historic site on the Tigris River now partially flooded by dam waters.
Police were still searching for the suspect.
Ankara is waging a two-pronged offensive to bomb Islamic State (IS) militants in Syria and PKK rebels in northern Iraq and southeast Turkey following a series of deadly attacks.
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