A large explosion has destroyed a building in the Spanish capital Madrid. 

Social media posts showed debris littering a street in the Puerta de Toledo area outside a multi-level residential building. Smoke rising from the area can be seen across the city. 

The explosion happened at about 3 p.m. local time in Calle de Toledo, just south of the center. A witness told Madrid newspaper ABC that "everything shook like a bomb" and that "much of the facade has fallen."

One building has collapsed, with smoke coming out of the building and rescue workers evacuating elderly people from a nearby nursing home.

A reporter for TVE public broadcaster said several had been injured, without giving details. A witness told Telemadrid broadcaster that there was at least one person trapped inside.

Emergency services could not immediately confirm if there had been injuries. A police spokeswoman said the area was being evacuated but could not confirm the source of the explosion.

La Sexta TV quoted government sources saying it may have been a gas leak. Officials could not immediately confirm.

Madrid's civil protection team (@madridprotcivil) tweeted: "Ongoing incident in the area of #PuertodeToledo. Please avoid the area and clear the way to emergency resources."

The city's emergency services (@EmergenciasMad) tweeted that nine fire engines and 11 ambulances had been despatched to the scene.

Leire Reparaz, who lives near the Puerto de Toledo, a local landmark, told The Associated Press that she heard a loud explosion.

"We didn't know where the sound came from. We all thought it was from the school. We went up the stairs to the top of our building and we could see the structure of the building and lots of grey smoke," the 24-year-old Madrid resident said.