An explosion has shaken the largely deserted streets of downtown Nashville early on Christmas day, shattering windows, damaging buildings and wounding three people, with authorities believing the blast was intentional.

Metro Nashville Police Chief John Drake said police were responding to a report of shots fired when they encountered a recreational vehicle blaring a recording that said a potential bomb was to detonate in 15 minutes.

Police evacuated nearby buildings and called in the bomb squad.

“Shortly after that, the RV exploded,” Mr Drake said at a midday news conference.

Investigators later recovered what they believe are human remains, but as yet have no idea if they are those of the bomber or a bystander.

Surveillance video published on a Twitter account on Friday (local time) that appeared to be recorded from across the street captured an audio recording that included the warning, “… if you can hear this message, evacuate now.” The blast was captured on the surveillance video seconds later.

Metro Nashville Police Department spokesman Don Aaron said three people were taken to area hospitals for treatment, although none were in critical condition. Authorities don’t know whether anyone was in the vehicle when it exploded, however.

Aaron said earlier that some people were taken to the department’s central precinct for questioning but declined to give more details.

FBI and first responders work on the scene after the explosion.

The FBI will be taking the lead in the investigation, said spokesman Joel Siskovic. Federal investigators from the Bureau of Alcohol, Tobacco, Firearms and Explosives were also on the scene.

The FBI is the primary law enforcement agency responsible for investigating federal crimes, such as explosives violations and acts of terrorism.

At noon, police dogs continued to search cars and buildings in the area.

A Philadelphia man staying in a nearby hotel said that when he heard the blast, he was knew it wasn’t a harmless noise.

“It was a very loud explosion,” said Joseph Fafara.

“We tried to rationalise it that it was an earthquake or something. But it was obvious it wasn’t an earthquake.”

Black smoke and flames were seen early Friday billowing from the area, which is packed with bars, restaurants and other retail establishments and is known as the heart of downtown Nashville’s tourist scene.

Buck McCoy, who lives nearby, posted videos on Facebook that show water pouring down the ceiling of his home. Alarms blare in the background and cries of people in great distress can be heard. A fire is visible in the street outside.

McCoy says he says he heard gunfire 15 minutes before the explosion rocked his building. McCoy said the windows of his home were entirely blown out.

“All my windows, every single one of them got blown into the next room. If I had been standing there it would have been horrible,” he said.

“It felt like a bomb. It was that big,” he told The Associated Press.

“There were about four cars on fire. I don’t know if it was so hot they just caught on fire, and the trees were all blown apart,” he said.

President Donald Trump has been briefed, according to White House spokesperson Judd Deere.

Tennessee Governor Bill Lee said on Twitter that the state would provide the resources necessary “to determine what happened and who was responsible”.

-AAP