Georgian Defense Minister Irakli Okruashvili, who rushed to the scene of the blast, told the private Rustavi-2 television station that three policemen had died, and between 13 and 18 people were wounded -- some seriously.
The identity of the wounded was not immediately revealed. Georgia's Novosti-Gruziya news agency quoted the provincial administration as saying there were policemen and passersby among them.
Television footage broadcast on the Rustavi-2 and Imedi television stations showed that the blast was sufficiently powerful to destroy a number of cars parked nearby and damage neighboring apartment blocks.
Novosti-Gruziya quoted regional officials as saying the car bomb was parked under the windows of the office of Shida Kartli police chief Aleksandre Sukhitashvili. Sukhitashvili was not injured in the blast.
Shida Kartli Governor Mikheil Kareli told reporters he believed the explosion was a "terrorist act," saying: "It is clearly a terrorist act. It is clearly a terrorist act."
Okruashvili gave a similar assessment, saying the bomb attack had been "carefully planned." He said those responsible for the blast "oppose the government's efforts to establish peace and restore order in the country."
Since his election, President Mikheil Saakashvili has declared war on crime and corruption and ordered a number of top criminal figures arrested.
Interior Minister Ivane Merabishvili postponed a planned visit to Batumi, the capital of the autonomous republic of Adjara, and went to Gori instead.
Former Interior Minister Giorgi Baramidze -- now a state minister in charge of Georgia's European integration -- said the government would take all measures to ensure the attack is not left unpunished. "The police are already on the scene and intensive work is under way," he said. "In whatever event, appropriate action will be taken. No stone will be left unturned. I have no doubt that we will establish who did this and who gave the order. All those who were involved in this crime will be punished."
There was no immediate word from Saakashvili, who has just returned from the World Economic Forum in Davos, Switzerland.
Members of Georgia's National Security Council were expected to meet later today to assess the situation.