PHILADELPHIA -- A natural-gas explosion on a densely populated city block on Monday razed a row house and injured eight people, including two babies and a contractor, and sent dozens of neighbours pouring out of their homes.

Some neighbours fled for safety while others immediately set to work helping rescuers locate victims in the rubble.

The explosion and house collapse, which critically injured the contractor, came less than two months after the city was stunned by a collapse that killed six people at a downtown demolition site when a large wall fell on an adjacent thrift store.

Inspectors spent several hours at the scene of Monday's explosion and concluded that a gas leak was to blame for levelling the unoccupied home, which was being remodeled in the middle of the south Philadelphia street of connected two-story brick homes.

Bricks showered onto the small street and crushed a car parked out front. The houses on either side of the destroyed home were standing but badly damaged, with large sections of their masonry walls gone.

Neighbour Christie Scibblo feared the worst.

"I was in the shower, and I thought my house was about to fall down," said Scibblo, a 26-year-old mother of four who lives four houses down from the collapsed home. "I ran outside, and I saw a firefighter rescuing an infant."

Scibblo said she also saw firefighters hosing down a man who had been burned.

The blast, which occurred late Monday morning, stunned neighbour Joseph Szymborski.

"When I heard the big explosion, I got knocked off my bed," Szymborski said. "I threw on my shoes -- instantly, you know something bad had to happen -- came out, ran down the street."

Szymborski ran outside to find "the house was in the street" and helped get three people to safety, though he was worried about debris from damaged buildings falling on him.

"It's situations like this, you just come together as a neighbourhood," Szymborski said.

Rescue crews said by early Monday afternoon that the search was complete and no one was unaccounted for.

The contractor had been working on a water heater in the basement of the destroyed home, police said. He was hospitalized with severe burns, Mayor Michael Nutter's office said.

Nearby gas and electrical utility service was turned off, and 70 homes were initially evacuated, though the city said most of the affected neighbours were being allowed back into their homes by late afternoon. Residents with nowhere to go were taken to a nearby school, which was used as a temporary shelter but closed Monday evening.

The American Red Cross of southeastern Pennsylvania said it was providing shelter for three families and had assisted three others.

Pennsylvania Public Utility Commission spokeswoman Jennifer Kocher said the state regulatory agency would have jurisdiction if the explosion occurred outside the home but not if it occurred inside.

After last month's downtown construction site collapse, a machinery operator was charged with involuntary manslaughter. A grand jury is weighing whether anyone else should be charged.