Five people were injured in an explosion in Nepal's far-western city of Dhangadhi on Thursday evening, local authorities said here Friday.

Assistant Chief District Officer of Kailali district, Mohan Raj Joshi, told Xinhua by phone that the explosion took place near a restaurant at the heart of the city.

"Of the five injured, two are undergoing treatment in local hospital in critical condition," Joshi said.

The local administration has stepped up security in the city. "We have confirmed that improvised explosive devices (IEDs) kept inside plastic bags were detonated near the restaurant," Joshi added.

Superintendent of Police Sudeep Giri told local media that dozens of police officials have been mobilized following the incident.

"We have started an investigation into the incident," Giri was quoted by local media as saying.

Police have seized a pistol from the site following the incident.

The preliminary investigation carried out by the police has shown that an underground armed outfit was responsible for the explosion, according to Giri.