A car bomb exploded in a residential area of the Syrian capital on Tuesday, killing one man and injuring two, witnesses said.

"We saw security officers hauling the body away," one of the witnesses said.

"Scores of police and intelligence officers rushed to the site. People in the neighbourhood are shocked. We are not used to such things in Syria," another resident said.

Security officials at the scene refused to comment.

The upmarket district houses an Iranian school, a police station and a main Syrian intelligence office.

A police truck towed away the destroyed car, a new model Mitsubishi Pajero.

Syria's Baathist government, which bans all opposition, prides itself on maintaining stability. The blast was not reported by state media and the target was not immediately clear.

Several officials from the Palestinian Islamist group Hamas were at the scene but there was no indication any of its members had been the target.

The witnesses and Palestinian sources in Syria and Lebanon said the blast was caused by a bomb planted inside the vehicle.

"The question on everyone's mind is whether any of the Palestinian leaders here was targeted and whether there has been another Israeli penetration," one Palestinian source said.

Senior Hamas officials, including leader Khaled Meshaal, live in exile in Damascus. At least one mid-level Hamas official has been killed in Damascus by a bomb attack in recent years.

Hamas blamed that attack on Israel.

Syria, which is technically at war with Israel, houses the leaders and headquarters of several other militant Palestinian groups who oppose peace talks between Palestinian President Mahmoud Abbas and Israel.

Palestinian leaders opposed to the peace negotiations held a meeting in Damascus last month, although Syria came under Western pressure to prevent the conference, which issued a call for dialogue with Abbas.