Residents reported hearing a blast around 1:30 a.m. (12:30 a.m. GMT) that set buildings ablaze on both sides of a street in the small seaside town of Saint-Laurent-de-la-Salanque, around 15 kilometers (9 miles) from the city of Perpignan.
“I heard a very loud explosion, then I saw huge flames,” said neighbor Nadine Bret, 59.
“The buildings were ravaged by the flames. It was total panic.”
She said building work had been going on in a fast-food restaurant on the ground floor of one of the buildings on Sunday.
Firefighters continued to search for potential victims of the fire Monday in two small blocks of flats left unstable by the damage from the blaze.
One man in his 30s was taken to hospital in critical condition after leaping from a second-story window to escape the fire.
Prosecutors said they had opened an investigation into the cause of the explosion.