The four were being interrogated over suspected links to Thursday's attack, said Durdu Kavak, chief prosecutor in southeastern Turkish province of Diyarbakir.
No one has claimed responsibility for the attack, but the Turkish leadership immediately blamed separatist Kurdish rebels who have carried out bombings across the country in the past.
Friday's statement did not indicate whether the four detained were suspected of being Kurdish rebels.
A bomb-laden car exploded in predominantly Kurdish Diyarbakir while a military service bus carrying soldiers was passing by. The blast set dozens of cars on fire and shattered the windows of buildings nearby, including one packed with students preparing for university entrance exams. Four of the dead were students, Kavak said in a written statement.
Turkish Prime Minister Recep Tayyip Erdogan blamed rebels of the Kurdistan Workers' Party for the attacks and vowed to keep up the decades-old fight against the rebels.
"This terrorist organization has never been representative of our people living in the southeast and it will not be," he said. "We will continue our determined fight and will not compromise."
The U.S. Embassy in Ankara called the bombing "a horrific example of the senseless tragedy that terrorism brings."
"We strongly condemn this violence and reiterate our determination to stand together with Turkey in combating terrorism in all its forms," the embassy said in a statement.
A group of local organizations, including labor unions and non-governmental organizations, in Diyarbakir also condemned the attack with a joint declaration.
The city was the scene of another bomb attack last summer targeting military staff. Seven people were wounded.
After Thursday's bombing, paramilitary police seized more than 140 pounds of explosives, in two separate operations across the country, state-run media said.
At least 30 pounds of C-4 plastic explosives were found in Bursa province, one of Turkey's commercial centers, and a man who was driving a minibus where the explosives were found was detained.
Another minibus with more than 110 pounds of explosives and hand grenades was found by security forces in Van, on the eastern tip of Turkey near the border with Iran, state-run Anatolia news agency said.
The rebels of the PKK have waged a guerrilla war since 1984 for autonomy in Turkey's southeast. Diyarbakir is the biggest city in the region.
More than 30 soldiers were wounded in Thursday's attack. It followed a series of operations by Turkish military into the north of neighboring Iraq, where the Kurdish rebels have bases.
The military claimed to have killed up to 175 rebels in the first cross-border assault alone. That operation, which took place on Dec. 16, was followed by at least two other air assaults confirmed by the military and a brief incursion by ground forces.
Pro-Kurdish Firat news agency said the PKK has declared big Turkish cities targets.