About 15 people are also reported to have been wounded in the explosion in Sassine Square, a busy part of Beirut’s eastern Ashrafiya district.
Ambulances have been seen rushing to the square. Witnesses say the blast was heard several kilometres away.
The intended target is unclear. Tensions in Lebanon have been rising as a result of the conflict in Syria.
Friday’s attack is the first major car bomb attack in Beirut for four years.
It occurred near the headquarters of the Kataeb, better known as the Phalange, a Maronite Christian group.
Ashrafiya is a predominantly Christian district.
Several cars were set on fire as a result of the blast. TV footage showed considerable damage to of buildings.
A nearby hospital is calling for people to donate blood to help treat the wounded.
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