An explosion struck the Bangladeshi capital Monday near the hotel where Indian President Pranab Mukherjee was staying, police said.
"A blast occurred at Sonargaon crossing in the noontime," Assistant Commissioner Shibly Noman said, adding that, a search was under way for suspects amid increased security deployment.
No injuries were reported.
The Indian president has been staying at the Pan Pacific Sonargaon hotel since arriving in Dhaka Sunday for a three-day official visit.
An Indian diplomat dismissed the possibility of a targeted attack.
Mukherjee was in his suite at the hotel when the explosion took place nearly half a kilometre away, Deputy High Commissioner of the Indian Embassy in Dhaka Sandeep Chakravarty told broadcaster NDTV.
The "small explosion" was caused by a harmless "fire-cracker type of device," rather than a bomb, and was in no way aimed at Mukherjee, he said.
Violence erupted across Bangladesh after a court last week sentenced to death a leader of the opposition Islamist Jamaat-e-Islami party for war crimes during Bangladesh's 1971 independence war against Pakistan.
At least 65 people have died as Jamaat-e-Islami activists and pro-government supporters clashed with each other and with security forces since the sentencing of Delwar Hossain Sayedee.
Police said the suspects in Monday's attack might have thrown the explosives from moving vehicles.