The incident happened at an Applegreen Service Station on the outskirts of the village of Creeslough in County Donegal on Friday afternoon.
The nearby Letterkenny University Hospital said it was “dealing with a serious incident, with multiple injured people requiring immediate attention.”
“The hospital has moved to Major Emergency Standby as it deals with this incident,” it said.
“We are appealing to the public not to come to the Emergency Department unless it is an emergency.”
Among those gathered at the scene cordon were relatives of people feared to have been in the station at the time of the explosion.
Unconfirmed reports at the scene suggested that people had been buried in the rubble.
According to local media reports, an explosion has resulted in a major collapse at the premises, with a number of vehicles damaged because of falling debris.
The main part of the building, which also contains apartments, is also said to be severely damaged.
Sinn Fein TD Pearse Doherty told the broadcaster RTE that the “devastating” explosion has left “a very very dark cloud" over the community.
"It ripped right through this building, and this was a very busy location at that point in time,” he said.
“Three o'clock, it's just after school, people were going to collect their pensions. This is a very very very busy locality here at this shop, this petrol station, this deli, the post office at this time.
A helicopter taking off from the Wild Atlantic Camp in Creeslough bringing those injured in the explosion this afternoon to hospital. pic.twitter.com/WeqpZ5gshZ
— Donegal News (@Donegal_News) October 7, 2022
“There's just quiet, it's surreal. People are just holding on for hope, holding on to hear news, positive news coming from the emergency services."
Independent Donegal councillor John O'Donnell said he was praying there were no fatalities.
Speaking to BBC Radio Ulster, he said: “What we're hearing is there's just absolute carnage in Creeslough at the moment, there's a massive gas explosion.”
Police said they were assisting other emergency services at the scene of a serious incident.
They added in a statement that motorists should seek other routes around the area in the wake of the major incident.
Applegreen said in a statement it “is aware of a serious incident at its dealer-operated location at Creeslough in Co Donegal.
“Emergency services are on the scene and are dealing with the incident.”