City Hall spokeswoman Tereza Kralova said the cause of the incident will be thoroughly investigated and "we believe it won't negatively affect tourism."
Windows in buildings located hundreds of meters from the blast were shattered, including some in the nearby National Theater, an ornate 19th-century structure that is one of the most important cultural institutions in the Czech Republic.
"There was glass everywhere and people shouting and crying," Vaclav Rokyta, a Czech student, told the AP near the scene.
The Faculty of Social Sciences of Prague's Charles University and the Film and TV School of the Academy of Sciences of Performing Arts are located next to the damaged building. Students had to be evacuated.
"I was in the bathroom, no windows, the door was closed. Honestly, if I had been in my bed I would have been covered in glass," said Z.B. Haislip, a student from Raleigh, North Carolina, who was in a nearby building.
The road closures caused major traffic disruption and confused thousands of tourists.
Rescuers were still searching the rubble, using sniffer dogs. Two or three people were still believed to be missing, firefighter spokeswoman Pavlina Adamcova said.
The building likely belongs to the Air Navigation Services of the Czech Republic, said Richard Klima, spokesman for the state-run company that provides air traffic information for civil aviation in the country.
Klima said about six other firms rented office space in the building.
The Prague blast comes the day after a possible gas explosion ripped off the side of a five-story residential building in France's Champagne country, killing at least two people and injuring 14 others
In 2006, another gas blast in Prague killed two men.