The blast injured two security guards and a 13-year-old girl nearby, CNN reported.
Deputy Prime Minister Awad Barasi said he had spoken with the French ambassador, who assured him the attack would not cause him to leave the country, which would have cut diplomatic relations between the countries.
The French Foreign Ministry condemned the attack. "In conjunction with the Libyan authorities, our government departments will make every effort to ensure that all light be shed on the circumstances of this heinous act and its perpetrators quickly identified," the ministry said in a statement.
The explosion occurred about 7 a.m., damaging the embassy, two nearby villas and several shops, which lost windows, Radio France Internationale reported.
The embassy was largely empty at the time of the blast, a French diplomat, speaking on condition of anonymity, told The New York Times.
Barasi said the injured girl would be taken to Tunisia for treatment.
One injured security guard had been released from the hospital but the other was listed in serious condition, the Times reported.
No group had claimed responsibility for the attack, though authorities suspected Islamic militants angry with France's military involvement in stopping Islamic militants in Mali were responsible, the Times said.