In this video image provided by Turkish television, two men attend to one of the injured in Istanbul, Turkey, on Sunday. (DHA/Associated Press)

Two explosions occurred in a busy residential neighbourhood in Istanbul, killing at least 16 people and injuring more than 150 on Sunday, the city's governor said.

The first blast went off about 9:50 p.m. local time in the working class Gungoren neighbourhood of Turkey's financial capital and the second one detonated about 10 minutes later as locals ran out to help the injured, freelance reporter David O'Bryne told CBC News.

The attack was Turkey's worst since Nov. 20, 2003 when al-Qaeda-linked suicide bombings struck the British consulate and a British bank, killing at least 30 people. Five days earlier, suicide truck bombers attacked two Istanbul synagogues, killing 27.

Huseyin Senturk, who owns a shoe shop in the area, told an Associated Press reporter that first explosion Sunday was in a telephone booth with the second, which could be heard a kilometre away, only about 40 metres away.

"The first explosion was not very strong," Senturk said. "Several people came to see what was going on. That's when the second explosion occurred and it injured many onlookers."

Police sealed off the two areas of a square where the explosions occurred. The square, where people gather at night, is now closed to traffic.

Istanbul Governor Muammer Guler said he's treating the bombings as a terror incident.

"There is no doubt that this is a terror attack," he told reporters, adding police were investigating. "The fact that there was a crowd in the area has increased the number of casualties."

He said 154 were injured and, of those, 15 were in critical condition.

Government officials have not said who was responsible for the attack and no group immediately claimed responsibility but CNN-Turk television, citing security sources, said police suspect Kurdish rebels. It said intelligence reports had suggested the rebels were planning a bombing campaign in Turkish cities.

"We know it is a terrorist attack, but which organization is responsible, we don't yet have that information," Deputy Prime Minister Hayati Yazici told journalists at the scene of the attacks.

Kurdish, leftist and Islamic militants are active in Istanbul and have carried out bombings in the city.

On July 9, gunmen believed to be inspired by al-Qaeda opened fire on police guarding the U.S. consulate in Istanbul, killing three officers. Three attackers also died in a shootout with police.

Kurdish rebels belonging to the Kurdistan Workers' Party, or PKK, have been fighting for self rule in southeastern Turkey since 1984. The violence has killed tens of thousands of people since then.

Turkey has conducted frequent air raids on suspected rebel positions in northern Iraq, including one earlier Sunday.

Earlier this year, it launched a weeklong ground offensive against the rebels.

Although most of the fighting is concentrated in rural areas of southeastern Turkey, the rebels occasionally launch bombing campaigns in Turkish cities and tourist resorts.

Sunday's attack came a day before the scheduled start of a top court's deliberations on whether to ban the Islamic-oriented ruling party because of its alleged attempts to undermine secularism.

The legal case has raised political tensions in Turkey, where the government is locked in a power struggle with elements of the secular establishment backed by the military and judiciary. But it was not clear whether the bombings were linked to the case.

With files from the Associated Press