Iraqi police say Islamic State militants also are using suicide bombers on motorcycles to navigate the Old City's narrow streets.
No group has yet claimed responsibility for the bombing, but such attacks have become commonplace in Iraq's violence-prone capital over the last two years.
Iraqi government forces, backed by USA advisers, artillery and air support, have cleared the east and half of western Mosul and are now focused on the Old City.
Now, eastern Mosul has been recaptured from the militants and efforts are underway to rehabilitate soccer fields, even as the battle for the city's west continues on the other side of the Tigris River.
The UN estimated that another half million civilians were still in ISIS-controlled areas of west Mosul.
He called the civilians apostates who deserve to be killed.
According to Rasoul, troops are on a "very short" distance from the Grand Nuri Mosque the landmark structure at the where ISIS leader Aby Bakr al-Baghdadi made his infamous sermon in 2014. The coalition says it bombed an area where civilians were reportedly killed, later saying it "probably" played a role in the civilian casualties.
"The bombs used by the Iraqi air force in Mosul are laser-guided and used when we ascertain the nature of the target", Hammah said, Baghdad Post reported.
Patrick Martin, Iraq analyst at the Institute for the Study of War, said Iraqi forces "are nearing the end of the operation to recapture Mosul" but "the final neighborhoods will be the most hard to recapture, especially the Old City and the remaining neighborhoods in northwestern Mosul".
As many as 500,000 civilians could remain in parts of western Mosul under Daesh jihadist group control, OCHA estimates.