A preliminary police probe indicated the explosion could have been a suicide bombing. Authorities are examining all angles to determine the motive behind the blast, the report added.
The explosion occurred Monday at around 7 p.m. local time (13:30 GMT) at a traffic light near the Red Fort metro station. The blast damaged three or four nearby vehicles and their occupants. India's News 18 broadcaster reported on Monday that at least eight people had been killed in the blast.
Indian Interior Minister Amit Shah said that a full-scale investigation into the matter had been launched. The exact cause of the explosion remains undetermined.
The Red Fort is located in Old Delhi and is one of the city's most popular tourist landmarks.