Police were called to Dimvädersgatan in northern parts of the Biskopsgården suburb at 10.48pm on Tuesday.
“An object has exploded (…) and shrapnel has gone through the window to an apartment on the ground floor,” police spokesperson Ulla Brehm told regional daily Göteborgs-Posten (GP).
According to the newspaper one of the men arrested on suspicion of being involved in a high-profile fatal shooting at a restaurant in the area earlier this year lives in the housing block.
Two people were shot dead and eight others were injured in the attack at a restaurant in Biskopsgården in March, an incident that grabbed global headlines and saw Sweden's Prime Minister Stefan Löfven cut short a trip to Brussels to meet residents mourning the killings.
Six months on, police in western Sweden have arrested four people on suspicion of being connected to the bloodshed, which was believed to be linked to growing gang warfare in the country's second largest city.
Meanwhile, police cordoned off a large area around Dimvädersgatan on Tuesday while officers investigated through the night. No suspects had been arrested by Wednesday morning.
Brehm told GP that although the explosion was believed to have been caused by a hand grenade, she was unable to confirm it.
“It could absolutely be a hand grenade, but we were going to look at what comes out of the forensic investigation before we say for sure,” she told the paper.
The blast comes just days after two people were hurt in a shooting in Gothenburg on the same night several gunshots were fired at a venue in Biskopsgården. No one was injured in the second incident.
Gothenburg has a long history of gang-related violence dating back to the early 1990s. Amir Rostami, a leading authority on Sweden's organized crime groups, who is based at Stockholm University told The Local in March that organized crime remained a persistent problem.
“Today, the gang environment is… I don't want to exactly call it the Wild West, but something in that direction,” he said.
“Some years ago, it used to be very strong groups controlling the criminal world, but today we've got more and a lot smaller groups fighting for control of their areas – and that has increased the number of conflicts we see between groups and individuals.”
In June a report by Swedish public radio programme Ekot revealed that a number of young people identified by Gothenburg authorities eight years ago as being at risk of joining gang violence have since continued to commit crimes, despite repeated interventions by Swedish social services.