Eight people were killed and over 20 injured in a bomb blast at a roadside restaurant on the outskirts of Islamabad [Images], police said on Wednesday.

The blast, which was initially believed to be a gas cylinder explosion, created a one-foot-deep crater at the eatery in the Model Town area late Tuesday night.

About 3.5 kg of explosives were used in the bomb, said officials from the bomb disposal squad.

Most of the victims were labourers and drivers. Police from the nearby Sihala police station rushed to the scene and took the injured and bodies to the Polyclinic Hospital and Pakistan Institute of Medical Sciences.

Superintendent of Police Kamran Adil told reporters that evidence were being collected from the explosion site.

Restaurant owner Raaz Wali denied reports that a gas cylinder caused the explosion, saying he only used kerosene stoves for cooking.

Eyewitnesses said they had seen a child placing a bag under a chair shortly before the blast.