Monaco authorities said three people were injured, while local media reported two of them were in critical condition. The identities of the victims have not been officially confirmed.
According to the reports, one of the victims was one of Ukraine's wealthiest businessmen construction tycoon Vadym Iermolaiev, while a woman aged between 50 and 60 and a teenager from the same family were also injured.
Reports said additional people suffered cuts and shock.
The unprecedented attack at about 9pm on Monday (5am AEST Tuesday) stunned the elite principality on the Mediterranean Coast.
Monaco's leader Prince Albert II described the incident as a "criminal explosion", ''an odious act" and a "shock for the entire Monegasque community" in a statement issued overnight.
All relevant state services had been mobilised in close co-operation with French authorities to identify those responsible, he said.
Monaco's State Minister Christophe Mirmand told French broadcaster BFMTV that three injured people were taken to hospital after the explosion but declined to confirm whether the incident was an attack.
An event of this kind had never occurred in the principality, he said.
Shortly before the blast, surveillance cameras captured a person leaving a backpack at the scene before fleeing, BFMTV reported, citing Monaco security authorities and the regional newspaper Monaco-Matin. The suspect remains at large.
Images published by media outlets showed CCTV footage of a running man wearing a dark hat.
The building is located on a square near the border with France, and the suspect reportedly fled on foot towards the French town of Beausoleil.
Mirmand said about 50 firefighters and more than 80 police officers responded to the scene.
French rescue teams also assisted, according to sources in France's Interior Ministry, and French and Monégasque police launched a joint operation to search for the suspect.
The mayor of the nearby French city of Nice, Éric Ciotti, described the incident as an "attack" in a post on X, calling it a "tragedy that strikes Monaco".
with AP
11°C