The car bomb was detonated as police buses passed a main tourist district, a major university and the mayor’s office.
Istanbul Governor Vasip Sahin said 36 people were injured in what is the fourth major bombing in Turkey's biggest city this year.
olice detained four people after the bombing, according to the state-run Anatolia news agency.
There was no immediate claim of responsibility but Kurdish militants have staged similar attacks, including one last month in Istanbul.
The blast hit the Vezneciler district, between the headquarters of the local municipality and the campus of Istanbul University, not far from the city's historic centre.
It shattered shop windows and scattered rubble over nearby streets.
A police bus that appeared to have borne the brunt of the blast was tipped onto its roof on the side of the road.
A second police bus was also damaged. The charred wreckage of several other vehicles lined the street.
Turkey has suffered a spate of bombings this year, including two suicide attacks in tourist areas of Istanbul blamed on the so-called Islamic State, and two car bombings in the capital, Ankara, which were claimed by a Kurdish militant group.
The attacks has hit the country's tourism sector and it is believed the number of foreign visitors to Turkey fell by 28% in April, the biggest drop in 17 years.
The outlawed Kurdistan Workers Party (PKK) claimed responsibility for a 12 May car bomb attack in Istanbul that wounded seven people.
In that attack, a parked car was also blown up as a bus carrying security force personnel passed by.
The PKK, which has waged an armed insurgency against the Turkish state since 1984, frequently targets passing police and military vehicles with remote-controlled car bombs in its attacks in the largely Kurdish southeast.
Turkish President Tayyip Erdogan has said the country's fight against terrorists will continue "to the end".
Speaking to reporters after visiting some of the injured in a hospital near the site of the blast, Mr Erdogan said the attack was "unforgivable"
Source: Reuters
Keywords: Istanbul, Turkey
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