The bombing, near the Zein al-Abidin Mosque and Aisha School in the al-Meidan quarter, also injured many others, SANA, Syria's national news agency, reported.
The bombing came a day after U.N. Secretary-General Ban Ki-moon said he was "gravely alarmed" by opposition reports that intense government shelling in the west-central city of Hama -- a center of the anti-regime opposition -- caused a row of cinder-block houses to collapse Wednesday, killing 69 people, at least 16 of them children.
The houses in the impoverished Mashaa al-Tayar neighborhood collapsed because most were built of cinder blocks stacked on top of each other without cement, an activist told The New York Times by Skype.
The official Syrian Arab News Agency reported the collapse, but said only 16 people died when a bomb-making operation by regime opponents went awry, with a series of blasts leveling the houses.
A spokesman for U.N.-Arab League envoy Kofi Annan said U.N. monitors visited the neighborhood Thursday but did not say what they saw. Activists told the Times the observers did not make it to where the buildings collapsed.
It was impossible to confirm independently the Hama accounts because Syria severely restricts non-regime journalists from traveling in the country.
Videos posted online and purported to have been shot in Mashaa al-Tayar after the attack showed residents climbing over mounds of debris, searching for bodies.
The bloodied body of a little girl in a pink shirt was shown being carried from the wreckage as men looked on, some sobbing, one of the videos reviewed by United Press International indicated.
Ban said in a statement Thursday the regime of President Bashar Assad was "in contravention" of an agreed April 12 cease-fire negotiated by Annan, a former U.N. secretary-general himself, because it refused to remove troops and heavy weapons from cities.
In Istanbul, Turkey, the Syrian National Council, the main opposition group in exile, issued a statement Thursday describing the Hama deaths as a blatant violation of the cease-fire.
It called on the U.N. Security Council to do more than it has done so far to protect Syrian civilians.
"The world continues to wait while the regime continues to massacre the Syrian people," a statement from the Syrian council said.
Civilians expressed concern Thursday the Assad regime would take advantage of a U.N. monitors' decision last week not to patrol Fridays, the normal day for mass rallies suppressed by the regime.
"We don't want to be used as a tool for escalating the situation," Moroccan Col. Ahmed Himmiche, head of the initial U.N. mission in Syria, told reporters in Damascus April 19.