Islamic State blamed for Istanbul attack killing 10, mostly Germans
German Foreign Minister Frank-Walter Steinmeier confirmed eight German citizens were among the dead and nine were injured and said these were now "hours of mourning, anger and horror." A Peruvian national was also confirmed killed.
Steinmeier vowed to fight all forms of terrorism and said Germany would not be intimidated by the murders.
Turkish Prime Minister Ahmet Davutoglu pinned responsibility for the blast on the Islamic State terrorist organization in a nationally televised address. The premier also spoke with German Chancellor Angela Merkel and expressed condolences.
Turkish Deputy Prime Minister Numan Kurtulmus, quoted by broadcaster CNN Turk, said the attacker was born in 1988 and had crossed into the country from neighbouring Syria.
Additionally, of the 15 people injured, two are in serious condition, the minister said.
In Lima, Peruvian Foreign Minister Ana Maria Sanchez confirmed a national was killed.
The German Foreign Office was urging citizens to avoid crowded areas in Istanbul following the attack.
The large blast, which could be heard several kilometres away, took place at around 10:15 am (0815 GMT) in Sultanahmet, home to the Hagia Sophia museum and the Blue Mosque, both major tourist attractions on the European side of the metropolis.
Emergency crews and police rushed to the scene of the blast, which was quickly cordoned off.
The government has imposed a temporary broadcast ban in the wake of the explosion.
State television and other major stations were not showing images from the scene. Reporters in Sultanahmet, including a dpa journalist, had difficulties photographing and accessing the site.
Speaking in Ankara, President Recep Tayyip Erdogan condemned the "terrorist" attack and said that, according to an assessment, a person with Syrian origins was the perpetrator.
The official death toll did not include the bomber. No group has claimed responsibility for the attack, which comes amid rising violence in Turkey.
The authorities hold Islamic State responsible for three major attacks last year - all targeting pro-Kurdish rallies - but the group has never claimed an attack in Turkey.
The country borders both Iraq and Syria, two nations in the throes of civil wars and where the extremist group holds territory.
The largest blast in Turkey's history took place in October, in Ankara. Two suicide bombers blew themselves up killing 100 people.
Islamic State militants were blamed for that attack, as well as for another suicide blast in July in the south of the country, which left more than 30 people dead.
Turkey stepped up its fight against Islamic State last year, after a period in which it was criticized for being slow to tackle the threat from the extremist group and shut its porous border to Syria.
Meanwhile, violence in the south-east of the country has soared, as state security forces battle Kurdish militants after a peace process collapsed in the middle of last year.
Hundreds have died in the south-eastern Turkey fighting, including members of the security forces, militants from the Kurdistan Workers' Party (PKK) and civilians. Strict curfews have been imposed on some districts, drawing sharp criticism from human rights groups.
Istanbul has seen sporadic violence too, mostly from far-left groups. A mortar explosion at an international airport in the city last month left one dead, with no clear claim of responsibility.
The last major terrorist attack in Istanbul took place in 2003, when suspected al-Qaeda-affiliated militants detonated four truck bombs over two days, killing at least 57 people. The attacks targeted Jewish synagogues, a bank and the British Consulate.
