Thursday's blast, a month after a car bomb wounded more than 50 people in the same district of the Lebanese capital, came amid sectarian tensions about the intervention of Shi'ite Muslim Hezbollah against Sunni rebels in Syria's civil war.
Defence Minister Fayez Ghosn said a Syrian man had been arrested for suspected involvement in the July bomb attack, underlining the extent to which Lebanon has become embroiled in its neighbour's conflict.
The explosion on Thursday was the deadliest attack in the capital for years, engulfing a busy south Beirut street in flames and recalling scenes from its 1975-1990 civil war.
Interior Minister Marwan Charbel said investigators were checking CCTV footage taken in the moments before the explosion to see whether the van believed to have carried the bomb had been driven by a suicide bomber or detonated remotely.
"The first hypothesis is that the driver blew himself up, while the second hypothesis says that the car may have been blown up from a distance," Lebanon's National News Agency quoted Charbel as saying.
Reporters who arrived at the scene minutes after the explosion saw a burnt-out car near the centre of the road, suggesting it was being driven when it blew up.
Hezbollah parliamentarian Ali Ammar told reporters in south Beirut yesterday that the death toll had reached 24, while Health Minister Ali Hassan Khalil said 21 bodies were taken to hospitals and another 335 wounded people had been treated.