The huge blast damaged passing buses and cars and wounded pedestrians in the vicinity, Xinhua said, adding that the two people killed were commuters on the road.
A fire subsequently engulfed the restaurant, sending plumes of smoke into the air, images on social media showed. The blaze has since been put out, a regional government information office said on its official microblog.
The cause of the explosion is still being investigated, although Xinhua said it could have been bottled liquefied petroleum gas in the restaurant.
Explosions and other mishaps are common in China, often because of patchy safety enforcement. The central government has pledged to improve checks to avert such accidents, reporting by Reuters.