Ten people, including four seriously wounded, were evacuated from the rubble of the building but an eight-year-old child and 80-year-old woman died.
Interior Minister Bernard Cazeneuve, who arrived at the site, said it appeared the explosion occurred because of a gas leak, but said he could not confirm that theory.
He added: "We should be prudent, because there are investigations on-going. There is no certainty."
About another ten people could still be underneath the rubble and rescue workers using dogs were scouring the scene of devastation in a bid to find anyone still alive but trapped in what was left of the block. Mr Cazeneuve said: "We could still find living victims in the hours to come."
One side of the buidling was ripped off completely, exposing the interiors of the apartments inside.
Colonel Bernard Turner, in charge of the rescue operation, said that "debris removal may take 24 to 48 hours" and "we have a good chance of finding victims alive under the rubble."
The tragedy happened at around 7am on Saturday. The block contained shops and apartments.
One thing rescuers do not know is how many people were in the apartment block as August is traditionally vacation season in France and some residents may have been out of town.
Mr Cazeneuve said his thoughts went out to the victims of those killed in the tragedy and French Prime Minister Manuel Valls also expressed his sadness.