The fire ripped through the market at Surmalu, said the first reports.
"After preliminary data, an explosion happened which set off a fire," said the emergency situations ministry in a statement, giving a toll of three dead and around 40 people hospitalised.
They also reported that a nearby building had collapsed and published the names of 25 people loved ones were trying to contact, saying they might be trapped under its ruins.
As the search for survivors continued, rescue workers were using a digger to clear away rubble.
They had so far pulled 10 survivors from the rubble and recovered one body, said the ministry statement.
The wholesale market at Surmalu is normally very busy on Sunday afternoons, which when the blast happened.
The cause of the fire has not yet been established, but local news reports, citing witnesses, said the explosion happened at a place that stored fireworks. The authorities have so far made no statement on what might have caused the fire.
Photos and videos posted on social media showed a thick column of black smoke over the market and what appeared to be a series of detonations can be heard.
A number of volunteers were also helping at the scene, scrambling to move piles of twisted concrete blocks and metal bars with their bare hands.
Nearby, firefighters kept their hoses trained on the smoking ruins, soaking them down with water.
In all, 200 firefighters and medical workers were sent to the scene, as well as fire engines and construction site equipment.