"For now, all we can say is that The United Nations Interim Force's (UNIFIL) forensics team is working with the Lebanese army to investigate the explosion," the mission's spokesman, Neeraj Singh, told AFP.
Nobody has yet claimed responsibility for the bomb attack which targeted a UNIFIL jeep on a main highway linking the capital Beirut to south Lebanon, where the troops are deployed.
The explosion, which occurred at the entrance to the mainly Sunni coastal city of Sidon, wounded two passers-by and six Italian troops.
Italian Defence Minister Ignazio La Russa said Saturday in an interview with La Repubblica newspaper that Rome wants to rapidly reduce the size of its contingent in the multi-national force.
"At the moment we have 1,780 soldiers, but it's too many. As we are no longer in command of the mission, then we should reduce our contribution to 1,100 as soon as possible," he told the daily.
Friday's blast came two days before the United Nations marks Peacekeepers Day and shortly after a commemoration ceremony for fallen troops was held in south Lebanon, an area largely under the control of Lebanon's Shiite militant Hezbollah.
La Russa confirmed Friday that six of his country's troops in Lebanon were injured, including two who were in critical condition.
"Of the two who were gravely wounded, one risks losing his eye while the other suffered a laceration of his carotid artery and has already been operated" on, La Russa said.
The attack, in a "normally quiet zone outside the area of operations," was caused by a rudimentary explosive device that targeted a UNIFIL jeep, La Russa said.
An earlier report from Italian news agency ANSA citing defence ministry sources had said one soldier was killed in the blast, for which no group has yet claimed responsibility.
An AFP correspondent at the scene said the front of the jeep had been destroyed in the blast, and several buildings nearby damaged.
Earlier in the day, UNIFIL held a ceremony at its headquarters in the southern village of Naqura close to the Israeli border to honour 292 peacekeepers killed since the force was established in 1978.
The explosion, the first of its kind since 2008, drew condemnation from local and international officials, including Lebanese caretaker premier Saad Hariri who said the blast targeted the "safety and well-being of Lebanon and its people."
UN chief Ban Ki-moon denounced the "deplorable" attack, saying his organisation would work with Lebanese authorities to ensure the perpetrators were brought to justice.
The UN Security Council also condemned the attack "in the strongest terms."
In Washington, US State Department spokesman Mark Toner condemned the bombing and called on the Lebanese government to "conduct a full investigation... and to ensure that the perpetrators are swiftly brought to justice."
The blast came as fears of security breaches are mounting in Lebanon, which has entered its fifth month without government after Syrian- and Iranian-backed Hezbollah forced the collapse of Hariri's pro-Western unity cabinet.
There are also fears the unrest in neighbouring Syria could spill over into Lebanon.
UNIFIL was initially set up to monitor Lebanon's border with Israel but expanded after a devastating 2006 war between the Jewish state and the Lebanese Shiite militant group Hezbollah.
The multinational force currently has 12,000 troops stationed in south Lebanon.
The force has been the target of three other unclaimed attacks, the latest in January 2008 when two Irish officers were wounded by a roadside bomb.
In the deadliest attack, three Spanish and three Colombian peacekeepers were killed in June of 2007 when a booby-trapped car exploded as their patrol vehicle drove by.