The blast took place around 8.30 am in a building housing the restaurant situated in Petlawad town, about 60 km from the district headquarters, sub divisional officer of police (SDOP), Petlawad, A R Khan said, Times of India reported.
"Nearly 15-20 people are feared dead in the mishap and as many were injured," he said.
Many others are suspected to be trapped in the debris, the SDOP said, adding that the exact number of casualties will be known once the debris is cleared.
Also, the gas cylinder explosion has caused damages to a number of adjacent buildings, he said.
Senior officials from Jhabua have rushed to the spot to launch rescue operations.