The suburb is a stronghold of the Shia militant group Hezbollah.
Hezbollah’s al-Manar TV station said the blast destroyed part of a facade of a building in a densely populated area of Haret Hreik district.
Beirut has been recently been hit by attacks linked to heightened Sunni-Shia tensions over the Syrian war.
Former minister Mohamad Chatah, a Sunni and a critic of Hezbollah, was killed by a car bomb last Friday. Six other people died and at least 50 were injured.
Former PM Saad Hariri, to whom Mohamad Chatah was an adviser, blamed Hezbollah for that attack but it has denied any involvement.
No-one has yet said they carried out the attack, but it came a day after Majid al-Majid, the head of a Sunni jihadist group which claimed a suicide bomb attack on the Iranian embassy in Beirut in November, was reportedly arrested.
Al-Manar TV showed large crowds gathered around twisted and burnt-out vehicles in front of a building that had been badly damaged in Thursday’s blast.
Initial reports say the bomb was detonated in a four-wheel-drive vehicle.
The street is home to shops, restaurants and residential buildings. The TV said the explosion took place a few hundred metres from the nearest Hezbollah political offices.
Majid al-Majid, the Saudi “emir” of the al-Qaeda-linked Abdullah Azzam Brigades, had said that attacks would continue in Lebanon until Iranian and Hezbollah forces stopped fighting alongside government forces in Syria.
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