Rescuers work in front of a destroyed building in Viareggio, Italy, early Tuesday after a train carrying gas canisters exploded in the coastal town in northern Tuscany. (Riccardo Dalle Luche/Associated Press)

At least 10 people are dead and 50 injured after a freight train derailed and two cars filled with gas exploded Monday night just outside a station in a small Italian town, police say.

A police official says the explosion engulfed several homes in the north Tuscan town of Viareggio, collapsing one building and setting fire to a vast area.

Seven people were killed when their house collapsed. Two drivers who were on the road alongside the tracks when the train derailed were killed. The 10th victim, a young man, died in hospital.

At least 50 people were hurt — 35 of whom were admitted to hospital with severe burns — in the accident, which occurred shortly before midnight local time in the seaside resort community north of Pisa.

The 14-car train carrying the liquefied gas was travelling from the northern city of La Spezia to Pisa.

Some 300 firefighters were battling flames while digging through the rubble of collapsed or burnt homes looking for casualties, said fire Chief Antonio Gambardella. He added that there could be more victims.