Eight people have been killed and 100 injured in a powerful explosion outside a police building in Turkey.

The explosion happened in Turkey's southeastern city of Diyarbakir hours after police detained the leaders of the mostly Kurdish region's biggest political party.

The detention of a dozen MPs from the pro-Kurdish Peoples' Democratic Party (HDP) including its co-leaders marks the "end of democracy" in Turkey, the party said in a statement.

"The goal of these measures is to shut down the third largest party in parliament.

"This is a dark day not only for our party but for all of Turkey and the region as it means the end of democracy in Turkey," it said, vowing not to surrender to these "dictatorial policies".

The arrests will heighten concern among Western allies about a deepening crackdown on dissent under President Tayyip Erdogan and about political stability in Turkey, a NATO member and a buffer between Europe and the conflicts in Syria and Iraq.

The arrests, which drew swift condemnation from the European Union, come as Turkey has detained or suspended more than 110,000 officials in the wake of a failed July coup.

Turkey is considering reintroducing the death penalty, and earlier this week journalists from a leading opposition newspaper were detained.

"Very bad news from Turkey. Again. Now HDP members of parliament are being detained," the European Parliament's Turkey rapporteur, Kati Piri, said on Twitter of a country that is seeking membership of the EU.

EU foreign policy chief Federica Mogherini said she was "extremely worried" by the arrests and had called a meeting of EU ambassadors in Ankara.

Today's explosion struck near a police station where some of the party leaders were being held in a terrorism probe.

It tore the facades off buildings and firefighters were searching for people trapped by debris.

The local governor's office said the cause of the blast "seems to be a car bomb used by members of the separatist terrorist organisation", a reference to the outlawed Kurdistan Workers' Party (PKK).

Two local residents said they had seen a minibus explode outside the police building in the Baglar district.

The explosion could be heard several kilometres away and a thick column of white smoke was seen rising from the site of the explosion.

Gunshots were heard after the blast.

Earlier, police detained Selahattin Demirtas of the Peoples' Democratic Party (HDP) at his home in Diyarbakir while his co-chairperson Figen Yuksekdag was held in Ankara as part of a terror investigation, the state-run Anadolu news agency said.

Their detention appeared part of a large-scale operation against the HDP, which is the third largest party in the Turkish parliament with 59 seats and the main political representative of the Kurdish minority.

NTV television said the pair were accused of spreading propaganda for the PKK while Anadolu said Mr Demirtas was accused of provoking violence in deadly protests in October 2014.

The raids come as Turkey remains under a state of emergency imposed in the wake of the failed coup on 15 July, which critics say has gone well beyond targeting the actual coup plotters.

Foreign Affairs Minister Charlie Flanagan expressed his concern following the events.

"I condemn the bombing outside a police station in south-eastern Turkey earlier today, which killed a number of people and injured many more. I extend my condolences to those who have been bereaved and my thoughts are with all affected by this attack.

"I am also seriously concerned at the removal of parliamentary immunity from some Kurdish deputies. Notwithstanding the sensitive security situation in Turkey following the attempted coup last July, it is vital that the rule of law, freedom of expression and democracy should prevail.

"All sides should cease hostilities and return to dialogue so that the political process to resolve the Kurdish issue is resumed," added Mr Flanagan.