At least three people were killed in Pakistan on Wednesday and 24 others were wounded in a blast in the northeastern city of Lahore, in an attack officials believe targeted police and security forces near the home of a Muslim leader.

The explosion took place in Johar Town, a residential area of the city, which is the provincial capital of Pakistan's most populous province, Punjab.

"So far, the three people killed and 24 others wounded included a police personnel who was deployed on a check post near a religious leader's house," police chief Ghulam Mahmood Dogar told reporters.

All the injured were being taken to the nearest hospital, while police cordoned off the area soon after the blast.

According to locals, the house of the head of the Jamaat ud Dawah group, Hafiz Mohammad Saeed, is also located in the area where the explosion took place. However, officials did not confirm that Saeed's house was targeted.

Saeed is currently in Lahore's Kotlakhpat jail, sentenced by a local court to 15 years in a terrorism-financing case earlier this year.

Punjab's police chief Inam Ghani said officials were currently assessing the damage. "There would be no compensation for the lives lost," he added.

Meanwhile, counter-terrorism security forces have taken over the investigation.

"After the detailed investigation, the CTD (Counter-Terrorism Department) will determine whether the blast was a suicide blast or a device was used," said Ghani.

Blasts in Pakistan's major cities have become increasingly rare in recent years following a massive crackdown on militant groups in urban areas along with a string of military offensives targeting terrorist strongholds along the Afghan border.