Authorities insisted though the most likely cause was an electrical short circuit and that there was no initial evidence that pointed to a terrorist attack.
"It was evidently a case of short circuiting," Interior Minister Aftab Sherpao told reporters at the scene.
"The forensic people have come and we are checking the whole place but there's no evidence so far of any terrorist activity or any blast in that sense."
A US State Department official in Washington said 11 staffers from the US embassy in Islamabad were having an evening meal at the Marriott when the explosion occurred.
The official said one of the diplomats suffered minor injuries and the others were unhurt.
Deputy superintendent of Islamabad police Khalid Masood told reporters at the scene that at least seven people were injured, "three of four" of whom were foreigners.
Masood said a Pakistani employee of the hotel was in a critical condition with burns to 90 percent of his body.
The explosion shattered the glass entrance of the Marriott, with the X-ray machine used to screen people as they entered almost completely destroyed.
"It seems to be a bomb explosion. The bomb was apparently hidden in one of the flower pots near the entrance of the hotel," hotel employee Khurram Ahmed told AFP at the scene.
"The blast was huge. It shook everyone in the hotel."
When told hotel employees said they believed the blast was caused by a bomb, Information Minister Shaikh Rashid told AFP: "That's not true. It was an electrical short circuit."
Hotel security guard Mohammad Saleem told AFP he heard a powerful explosion.
"Broken glasses flew around us. I felt a shock and fell down. There was blood on the floor around me. We don't know what was the source of the blast but it was a very powerful blast."
Hotel guests in their rooms well away from the entrance said they felt the explosion.
"I was in my room and I thought there was some earthquake, I rushed out of the hotel," Pakistani guest Mohsin Ahmed said.
"There was panic and people were trying to get out of the premises."
The usually glittering lobby was also badly damaged with glass shards and broken chandeliers scattered on the ground.
The Marriott is in a regular haunt for foreigners. "It's the only place for entertainment," the information minister said.
It is located in the heavily guarded area close to official residences of federal ministers and provincial legislatures.
According to PIMS sources four persons, including two Italians, have been admitted to the Pakistan Institute of Medical Sciences with minor injuries.
Those who have been admitted to the PIMS are Marti Albani and Pila Gee (both Italians), Robina Zafraal of Sohan, Islamabad, and Mubashir Hussain of Rawalpindi. Mubashir is stated to be in critical condition.
Other three injured - Babar, Pervez Zahoor and Farooq - were admitted to the Federal Government Services Hospital.