The explosion, which occurred at around 5 a.m., tore through four floors of an apartment building in the suburb of Blinovo, killing a 67-year-old woman and her 14-year-old grandson, police said.
Television showed images of shattered windows and a gaping hole in the side of the building, its white walls darkened by soot and ash. Rescue workers could be seen scaling the charred facade on ladders to pull out survivors.
Local police found a gas canister at the scene of the explosion, but countered suggestions that the incident was an accident and maintained that an as yet unidentified explosive device caused the blast, they said in a statement on their web site.
Specialists from the government technological watchdog, after inspecting the canister and nearby gas mains, concurred with police that the explosion was not an accident, Interfax reported.
"According to unconfirmed information, it could not have been a gas explosion, because the building was not connected to gas," a police spokeswoman said, Reuters reported.
Police are considering other versions of events, however, including the possibility that the explosion was caused accidentally by contraband gas smuggled into the building by residents, the news agency said.
Regional officials warned against connecting the deadly explosion with rising tensions in the neighboring breakaway Georgian republic of Abkhazia, after another bomb detonated near the de facto Abkhaz-Georgian border in the Zugdidi region within hours of the Sochi explosion, Interfax reported.
The explosion, near an outpost manned by Russian peacekeepers, was the third bombing this week. No casualties were reported.
Krasnodar Governor Alexander Tkachev denied any connection between the bombings and warned the media not to politicize the attack during a press conference, Interfax reported.
"I think that their politics are at play for those people who would seek to make a connection between this bombing and the bombings in Abkhazia," he told reporters.
Moscow lobbied extensively to host the 2014 Olympics, even sending then-President Vladimir Putin to make a personal pitch to the selections committee. Russia has portrayed its selection as a sign of its prestige, symbolizing an increase of its presence and influence on the international stage.
In a sign of how seriously the Kremlin takes the attack, police announced that a team of experts from Moscow was being flown down to the southern region to handle the investigation.
City officials also quickly announced a total compensation package of 10,000,000 rubles ($426,500) for the victims of the blast, to be paid from the city budget, Interfax reported.
Investigators are treating the Sochi case as one of criminally negligent homicide, police said.
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