The ‘explosion’ is said to have taken place where two secret underground facilities are located, one of which is for chemical weapons research.
The claim was made by the country’s state broadcaster IRIB but officials were quick to deny the rumours.
IRIB said power had been cut in the area of the city’s suburb where the blast occurred.
It provided no further information about the cause of the blast or possible casualties.
The governor of Qods city, Leila Vaseghi, was quoted by the semi-official Fars news agency as saying no explosion had occurred, but that there was a power outage that lasted about five minutes.
The head of the fire department in Qods city denied receiving any reports of an incident or explosion in the past 24 hours, IRIB reported.
It was not immediately clear if the reported incident had taken place in Qods or in a different area of the Iranian capital, and residents contacted by Reuters in other parts of the city said they had heard no explosion.
Iranian military expert Fabian Hinz told the New York Times: “There are two underground facilities, a site associated with chemical weapons research and an unidentified military production site,” in the area where the blast is said to have happened.
The paper added the mayor of nearby town Garmdareh claims residents heard an explosion at a factory making gas cylinders.
There have been a number of explosions around Iranian military, nuclear and industrial facilities since late June.
Earlier this month the Islamic Republic admitted “significant damage” had been caused by a mystery blast at one of its nuclear facilities at Natanz.
The resulting blaze at the Natanz nuclear facility caused damage which could slow the development of centrifuges used to enrich uranium, one official revealed.
That blast was the sixth incident to occur at sensitive sites in Iran in just nine days.
A fire also broke out on Saturday in the transformer of an electricity plant in the city of Ahvaz, in the west of the country.
An explosion was also heard at a missile factory at Khojir near Tehran earlier this month.
A total of 19 people were killed in an oxygen tank explosion at a hospital in Tehran and a chlorine gas leak from a chemical plant near the Gulf coast.
The number of growing incidents have led some in Iran to suspect them being the targets for cyber sabotage.
Iran’s state news agency IRNA addressed what it called the possibility of sabotage by enemies such as Israel and the US, although it stopped short of accusing either directly.
Israel’s defence minister then said it was not “necessarily” behind every mysterious incident in Iran.
No evidence has been produced to support the claims.
Natanz is the centrepiece of Iran’s enrichment programme, which Tehran says is for peaceful purposes.
Western intelligence agencies and the U.N.’s nuclear watchdog (IAEA) believe it had a coordinated, clandestine nuclear arms programme that it halted in 2003.
Tehran denies ever seeking nuclear weapons.
Iran agreed to curb its nuclear programme in exchange for the removal of most international sanctions in a deal reached between Tehran and six world powers in 2015.
But it has gradually reduced its commitments to the accord since U.S. President Donald Trump’s administration withdrew from the deal in 2018 and reimposed and intensified sanctions that have battered Iran’s economy.
The deal only allows Iran to enrich uranium at its Natanz facility with just over 5,000 first-generation IR-1 centrifuges, but Iran has installed new cascades of advanced centrifuges.
Iran, which says it will not negotiate as long as sanctions remain in place, has repeatedly vowed to continue building up what it calls a defensive missile capability run by the Revolutionary Guards, in defiance of Western criticism.
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