Initial statement released by Bursa Governorate said that the explosion carried out by a female suicide bomber, who was killed in the blast.
Police sources told reporters at the scene that the woman is a 25-year-old; and the bomb probably exploded earlier than planned, limiting casualties.
The blast took place as a funeral prayer that followed afternoon prayer was about to be held at the mosque, Daily Sabah reported.
Taking place at the heart of the city, the explosion smashed the windows of nearby shops located in the city's historic bazaar and caused panic.
Ambulances and rescue teams have been dispatched to the area. The police cordonned off the area and conducted a search for the possiblity of a bomb.