Two people were killed and another critically injured on Thursday in an explosion at a scrap yard in the tourist city of Agra, in the northern Indian state of Uttar Pradesh.

The blast took place in the crowded Tajganj area, about 5 km (3 miles) from the famed Taj Mahal, one of India's most popular tourist destinations.

Agra police said the incident took place while a scrap-dealer was separating explosive material from metal procured from the military, India Today online reported.

Two people died on the spot, while a woman, who incurred serious injuries, has been admitted to the district hospital.

Officials of anti-terror squad (ATS), bomb disposal squad and forensic experts are investigating the incident.

The Taj Mahal, a white marble mausoleum, situated on the banks of the river Yamuna, is a UNESCO World Heritage site.