Police have sealed off the area popular with tourists and evacuated people from several nearby houses, Prague police spokesman Tomas Hulan told Czech TV.
"We have treated up to 20 people, and we are trying to find out if there are people buried in the rubble," Prague emergency service spokeswoman Jirina Ernestova told AFP.
An AFP photographer at the scene saw dozens of people with cuts, likely sustained by shattered glass from windows along the debris-covered street.
"A gas blast seems to be the most likely cause. The explosion was rather massive and damaged windows in several streets," Hulan said.
Czech media quoted witnesses as saying they could smell gas in the street.