"This explosion hit a pipeline carrying gas from Sarakhs to Mashhad. Sixteen people were injured as the result," energy official Alireza Gharibi was quoted as saying by the official news agency Irna.

"All those injured were transferred to a hospital in the city of Mashhad and are being treated," he added.

Gharibi said the explosion had caused no other damage, but the semi-official Mehr news agency said two people were killed.

Mehr said the blast on Friday evening was caused after an excavator mistakenly struck the pipeline.

Iran has been hit by sanctions from the United States, the European Union and the United Nations Security Council because of its disputed nuclear program, which the West fears is aimed at building nuclear weapons. Tehran denies the charge.

Iran is the world's fourth-largest oil producer and also sits on the world's second largest natural gas reserves. The country's economy is heavily dependent on oil and gas revenues.