At least 41 flats were quit and 60 firefighters attended to the explosion.
Both men who were arrested were bewitched to hospital for treatment, the Metropolitan Police said.
The emergency services are at the background following a blast in Ardleigh Green Road, Hornchurch at around 5pm on Monday.
Two child at the scene were taken by London Ambulance Service to an east London nursing home.
Another two people are currently being treated at the scene and one person has aided themselves at a hospital with injuries.
A police spokeswoman said: “The heat were called at 5:14pm to reports of an explosion at a block of flats in Ardleigh Untrained Road. Hornchurch.
“Officers, the London Fire Brigade and the London Ambulance Post are currently at the scene.
“We await an update as to the number of people injured.
“At this ancient stage officers are unable to confirm the cause of the explosion but enquires are underway.
“Inhabitants are in the process of being evacuated from the building. The local authority has been educated.
“Local road closures are in place. Motorists and pedestrians are advised to leave alone the area.”
Jason Smedley, who works close to the Bridge Point construction, said he was in his office when the blast occurred.
The 46-year-old said: “We see the whole building shake,” and added he could soon see “flames billowing”.
A Havering Convention spokesman said they were working to ensure the evacuated residents had somewhere to stop.
One social media user, Garry said on Twitter: “Hoping the injureds and nature of injuries in the Hornchurch explosion are minimal.”
The A127 is closed in both directorships and motorists and pedestrians are advised to avoid the area.