Chabahar is a free trade zone and the site of an Indian-backed port complex which is being developed as part of a new transportation corridor for land-locked Afghanistan.
Meanwhile, Iranian Foreign Minister Mohammad Javad Zarif claimed that those behind the attack were backed by foreign countries and would be brought to justice.
A number of Iranian media have reported a auto explosion in the largest port city in Sistan-and-Balochistan province, Chabahar.
Iran also says that militant groups are sheltering across the border in Pakistan and has threatened to attack their bases if Islamabad does not confront them. There was no immediate claim of responsibility.
He was apparently referring to a highly successful operation by Iranian intelligence services, which led to the capture in 2010 of Abdolmalek Rigi, the ringleader of the so-called Jundullah terror group.
India is developing the Chabahar port along with Iran and Afghanistan.
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Pakpur also said several hours after the explosion that calm and security had returned to the city of Chabahar. Later reports dismissed that the police chief of Chabahar was among the casualties.
The perpetrators of such crimes will soon be identified and dealt with, he added. New Delhi considers the port in Chabahar, which lies in Sistan-Baluchistan province of Iran, very crucial for its strategic interest in the region.
The official, however, emphasized that people in this area of Iran stand firmly united, and will foil all enemy plots.
The attack comes as Iran's economy is reeling in the wake of the U.S.re-imposing sanctions lifted under Tehran's nuclear deal with world powers.
Mohammad Hadi Marashi, deputy governor for security affairs, told state TV that two police officers were killed in the attack.
Last year, in the first deadly assault claimed by Islamic State in Tehran, 18 people were killed at the parliament and mausoleum of Ayatollah Ruhollah Khomeini, founder of the Islamic Republic. A year ago the group claimed responsibilty for a blast at an oil pipeline in Iran's southern Khuzestan province. "There can be no justification for any act of terror", an MEA statement said.