Militants staged twin bomb and shooting attacks against Norway's government Friday, as a deadly explosion ripped through ministry buildings and a gunman opened fire at a meeting of the ruling party.

A police spokesman said a "bomb" was behind an explosion by the government headquarters in Oslo, which Norwegian media said left at least two people dead.

"A powerful explosion has taken place in the government quarter," Norwegian police said in a statement, though Prime Minister Jens Stoltenberg was safe.

"Police can confirm there were deaths and injuries following the explosion in the government quarter this afternoon," police added.

A police official told a press conference that authorities had little clue who or what was behind the attack.

"We have no main theory, we don't even have a working theory," the official said. "We already have enough to do to get an understanding of the situation."

Speaking to reporters, the police spokesman said "several dozen" people had been wounded in the blast which caused widespread damage to both the prime minister's office and the finance ministry.

The spokesman said a vehicle had been seen driving at high speed in the area just before the explosion but did confirm that the blast had been caused by a car bomb.

Adding to the confusion, a man disguised as a police officer opened fire Friday at a youth meeting of the ruling Labour Party in Utoeya, an island on the outskirts of the capital Oslo, state television NRK reported.

Five people were wounded in the shooting, according to reports.

Stoltenberg had at one point been scheduled to attend the event, police said.

Images on Norwegian television showed the prime minister's office and other buildings heavily damaged, sidewalks covered in broken glass and smoke rising from the area.

Police had sealed off the area, which also houses the country's biggest tabloid newspaper Verdens Gang (VG). They had also urged residents to stay in their homes.

The area is located in the centre of Oslo and usually very busy, but Friday's blast came at a time of year when many residents of the capital are away on holidays.

Stoltenberg gave a telephone interview to show that he was unharmed after the deadly blast, which he called a "serious situation".

"Even if one is well prepared, it is always rather dramatic when something like this happens," he said in the interview with a Norwegian TV station.

Two cabinet ministers earlier said that Stoltenberg had been scheduled to be visiting areas far outside Oslo on Friday.

The EU condemned the attacks as "acts of cowardice" while the US State Department called the Oslo blast "despicable".

Witnesses said the damage around government headquarters was extensive while some said that police had spoken of two bombs.

"I see that some windows of the VG building and the government headquarters have been broken. Some people covered with blood are lying in the street," a journalist with public radio NRK said from the scene.

"There is glass everywhere. It is total chaos. The windows of all the surrounding buildings have been blown out," said NRK journalist Ingunn Andersen.

The radio reported that the explosion seemed to happen near the finance ministry, which is near the Norwegian prime minister's office and the VG editorial offices.

Photos posted on the NRK website also showed shattered glass in front of the devastated facade of the VG building, soldiers closing off the area and people surrounding someone apparently injured in the blast.

It was not immediately known who was behind the bombing, but Norway's intelligence police agency (PST) said in February that Islamic extremism was a major threat to the country.

Islamic extremism is "our main priority and our main concern," PST chief Janne Kristiansen said at the time, while presenting the agency's annual risk assessment report.

The report said: "Although few people in Norway support Islamic extremism, there are activities within some groups that could contribute to heightening the security risk in 2011."

NATO member Norway, which counts some 500 troops in Afghanistan, has never suffered an attack at home by Islamic extremists.

However, police last year arrested three Muslim men based in Norway suspected of planning an attack using explosives in the Scandinavian country.

Norwegian prosecutors earlier this month also filed a terrorism charge against Mullah Krekar, founder of the Kurdish Islamist group Ansar al-Islam, who was accused of threatening a politician with death over his potential deportation from the country.

Krekar had warned that "Norway will pay a heavy price" if he were deported.

Norwegian F-16 fighter jets are also participating in air strikes in Libya, though the country has said it will withdraw its forces from the Libya operations on August 1.

Neighbouring Sweden was targeted in a suicide bombing last December when an Iraqi exile blew up himself and his car in a deserted side-street off of Stockholm's busiest pedestrian thoroughfare, injuring two people.

Fellow Scandinavian country Denmark was also the target of vehement protests in the Muslim world after Danish daily Jyllands-Posten's 2005 publication of controversial caricatures of the Prophet Mohammed.

Norwegian newspaper Aftenposten had published reproductions of the cartoons including the one of which led to the Westergaard.

The Norwegian capital is well-known symbol of international peace efforts, including as the birthplace of the 1993 Israeli-Palestinian Oslo Accords.