The explosion, caused by a "very low intensity improvised device" damaged the window panes of three nearby parked cars, a Delhi police spokesman said in a statement.
"Initial impressions suggest a mischievous attempt to create a sensation," the statement said.
"An explosion occurred recently near the Israeli embassy in India. There were no casualties in the blast, and no damage to the building," Israel's foreign ministry said in a statement.
"The incident is under investigation by the authorities in India, who are in contact with the relevant Israeli authorities."
The blast occurred shortly after 1700 IST (1130 GMT), while India's President Ram Nath Kovind and Prime Minister Narendra Modi were participating in a military ceremony a kilometre away from the site.
A Reuters eyewitness said the site of the blast was quickly cordoned off by police.
In 2012, a blast near the embassy in New Delhi injured an Israeli diplomat's wife, her driver and two others. It coincided with an attack on another Israeli diplomat in Tbilisi, Georgia.
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