At least 70 people were injured in the blast at the open-air San Pablito Market in Tultepec, in the State of Mexico.

The explosion ripped through the market on the northern outskirts of the capital on Tuesday afternoon as it was crowded with shoppers buying fireworks for the holidays, sending a huge plume of smoke billowing into the sky.

Chief prosecutor Alejandro Gomez raised the death toll from the nine that had been previously announced, in comments broadcast on local television.

"My condolences to the families of those who lost their lives in this accident and my wishes for a quick recovery for the injured," said President Enrique Pena Nieto.

Sirens wailed and a heavy scent of gunpowder lingered in the air after the blast at the market, where most of the fireworks stalls were destroyed.

The smoking, burned-out shells of vehicles ringed the perimeter, and first responders and local residents wearing blue masks over their mouths combed through the rubble and ash. Firefighters hosed down still-smouldering hotspots.

Crescencia Francisco Garcia arrived in the afternoon to buy fireworks and said she was near the middle of the grid of stalls when the explosions began around 2.30pm local time.

"All of a sudden it started booming," the 41-year-old Mexico City resident said. "I and the others surrounding me all took off running."

Eventually she was able to find her daughter, son-in-law and three grandchildren who were waiting in a car just inside the perimeter fence.

The Mexican Red Cross said it sent 10 ambulances with 50 paramedics to the scene.

National Civil Protection Coordinator Luis Felipe Puente told Milenio television that some nearby homes were also damaged. The scene remained dangerous and he asked people not to come within three miles to avoid hampering the emergency response.

A fire engulfed the same market in 2005, touching off a chain of explosions that levelled hundreds of stalls just ahead of Mexico's Independence Day. A similar fire at the San Pablito Market also destroyed hundreds of stands in September 2006.

Many in Mexico traditionally celebrate holidays - including Christmas and New Year's Eve - by setting off noisy firecrackers and rockets.