The explosion hit just before the afternoon rush hour amid an area of office buildings on Adderley Street, one of the city's main roads. It came from a spot about 300 yards from the consulate.
"The U.S. Consulate's operations were not affected," said consulate spokesman Brian Penn.
U.S. officials do not believe the explosion was directed at U.S.
interests or the consulate, said CBS News State Department Reporter Charles Wolfson. No injuries to Americans or to the consulate have been reported.
Police cordoned off the area and were seen leading away two women they said were witnesses to the explosion. Several people were hospitalized with unspecified injuries.
"I am just completely amazed and thankful that no one was maimed or killed," said Ebrahim Rasool, leader of the provincial African National Congress party.
In the past two years, Cape Town has been the target of numerous bomb attacks that have killed two people and injured at least 100. Police have blamed a Muslim vigilante group called People Against Gangsterism and Drugs for some of the explosions.
"What can you do? These people who are doing this are faceless," Mayor William Bantom said.
It was unclear whether the blast might have been targeting the U.S. consulate. In August 1998, powerful bombs exploded at the U.S. embassies in Kenya and Tanzania, killing 224 people, including 12 Americans.
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