The Islamic Revolution Guards Corps (IRGC) said in a statement that terrorists detonated an explosive device at 9:30 a.m. local time (0600 GMT) in the city of Saravan, located 1,749 kilometers (1,086 miles) southeast of the capital Tehran, Press TV reported.
The statement added that a woman was among the casualties.
Sistan and Baluchestan – which borders Pakistan -- has seen several terror attacks targeting both civilians and security forces over the past years.
Iranian forces have repeatedly dismantled terror groups in the province, foiling their planned attacks and confiscating weapons and ammunition in the course of their security operations.
Terrorist groups carrying out similar attacks against Iranian interests in southeastern and southwestern parts of the country have known links to Saudi Arabia and a number of other repressive regimes in the Persian Gulf region.
Riyadh is widely believed to be a key sponsor of Takfiri terrorists, who are inspired by Wahhabism, an extremist ideology preached by Saudi clerics. The extremist ideology promoted by Riyadh has put Saudi Arabia and Iran on the opposing sides of various conflicts across the Middle East.
Saudi Crown Prince Mohammed bin Salman, who is mired in an ongoing seven-year conflict against its southern neighbor Yemen, has pledged to "take the war into Iran".