The prime minister, Jens Stoltenberg, was working at home at the time of the bombing – the first in Norway since the Second World War – and was unharmed.
Bombing in Oslo kills 7; up to 25 feared dead in shooting
OSLO // A powerful bomb tore into the heart of Norway yesterday, killing at least seven people and injuring 15 as it ripped open buildings including the prime minister's office, while a gunman dressed as a police officer opened fire at a youth camp on an nearby island.
Police said they believed incidents were connected, but could not immediately confirm Norwegian media reports that several people were killed at the camp.
An eyewitness said he saw between 20 and 25 bodies.
Police Inspector Bjoern Erik Sem-Jacobsen said a suspect in the shooting was arrested. He said the suspect pulled out a gun and started firing into the crowd of youths.
The prime minister, Jens Stoltenberg, was working at home at the time of the bombing - the first in Norway since the Second World War - and was unharmed, according to his senior adviser Oivind Ostang. Mr Stoltenberg held a crisis meeting of his government late last night.
A square in Oslo, where the Nobel Peace Prize is awarded, was covered in twisted metal and shattered glass, and carpeted with documents from the surrounding buildings.
The buildings around the square house government offices and the headquarters of some of Norway's leading newspapers.
Most of the windows were shattered in the 20-floor building where the prime minister and his administration work.
Oslo police said the explosion was caused by "one or more" bombs, but declined to speculate on who was behind the attack.
They later sealed off the nearby offices of independent broadcaster TV2 after discovering a suspicious package.
Oslo police also sent antiterror units to the youth camp on an island 40 kilometres from the capital after reports of the shooting there.
The Labor spokesman, Per Gunnar Dahl, said a man dressed in a police uniform was shooting at youths assembled for the party's annual youth camp. He said unconfirmed reports claimed that five people were hit, and that "we don't know how serious". He said 700 people, mostly teenagers between 14 and 18, were assembled for the camp.
"There is a critical situation at Utoeya," Mr Stoltenberg told TV2. His calendar showed that he had been scheduled to make a speech at the meeting.
The European Union president Herman Van Rompuy yesterday decried the deadly bombing as an act of "cowardice".
"I am deeply shocked by the bomb blasts this afternoon in Oslo which have killed a number of innocent people and left many others injured," Mr Van Rompuy said in a statement.
"I condemn in the strongest terms these acts of cowardice for which there is no justification."
In Washington, President Barack Obama extended condolences to the people of Norway and said the bomb blast and shooting showed "no country large or small" was immune from such violence and demonstrated the need for enhanced intelligence sharing.
State Department spokeswoman Heide Bronke Fulton called the violence "despicable".
It was not immediately known who was behind the bombing, but Norway's intelligence police agency (PST) said in February that Islamic extremism was a major threat to the country.
Islamic extremism is "our main priority and our main concern," PST chief Janne Kristiansen said at the time, while presenting the agency's annual risk assessment report.
The report said: "Although few people in Norway support Islamic extremism, there are activities within some groups that could contribute to heightening the security risk in 2011."
The Nato member Norway, which has 500 troops in Afghanistan, has never suffered an attack at home by Islamic extremists.
However, police last year arrested three Muslim men based in Norway suspected of planning an attack using explosives in the country.
Norwegian prosecutors this month also filed a terrorism charge against Mullah Krekar, the founder of the Kurdish Islamist group Ansar al-Islam, who was accused of threatening a politician with death over his potential deportation from the country.
Mr Krekar had warned that "Norway will pay a heavy price" if he was deported.
Norwegian F-16 fighter jets are also participating in air strikes in Libya, though the country has said it will withdraw its forces from the Libya operations on August 1.
* With reporting by the Associated Press, Bloomberg News, Reuters and Agence France-Presse