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The attack took place soon after Friday prayers in Prabhani, a town about 400 kilometres (250 miles) east of India's financial capital, Bombay (Mumbai).
Three men on motorcycles threw an explosive device into the mosque, a police spokesman in the town told the Associated Press news agency.
Police are searching for the attackers, whose identities are not known.
There were isolated incidents of violence after the blast, but the authorities imposed a curfew to curb trouble.
'Could have been worse'
Dozens of worshippers were inside the Mohammadi mosque when the bomb exploded.
State Home Minister Kripa Shankar Singh told the BBC that the number of casualties would have been higher if the bomb had gone off during the prayers.
Mr Singh said that Prabhani had no history of clashes between the majority Hindu community and Muslims, of whom there are many in the area.
A string of bomb explosions has rocked the western state of Maharashtra over the last year, nearly all of them in Bombay.
More than a 100 people died in the blasts, which were blamed on local Muslim organisations.