Five of the injured were in serious condition and a child was among the injured, Portugal's National Institute for Medical Emergencies said in a statement on Wednesday, adding that an unknown number of foreigners were among the injured.
Authorities called it an accident, the worst in the city's recent history, and it cast a pall over Lisbon's charm for the millions of foreign tourists who arrive every year. Officials did not immediately provide a cause of the crash.
Australia's Department of Foreign Affairs says it is not aware of any Australians killed or injured, but its officials are making urgent inquiries.
The yellow-and-white streetcar, which is known as Elevador da Gloria and goes up and down a steep downtown hill in tandem with one going the opposite way, was lying on its side on the narrow road that it travels along.
Its sides and top were crumpled, and it appeared to have crashed into a building where the road bends. Parts of the vehicle, made mostly of metal, were crushed.
"It hit the building with brutal force and fell apart like a cardboard box," Teresa d'Avó told Portuguese TV channel SIC.
Several dozen emergency workers were at the scene but most stood down after about two hours.
Eyewitnesses told local media that the streetcar careened down the hill, apparently out of control. One witness said the streetcar toppled onto a man on a sidewalk.
Carris, the company that operates the streetcar, said scheduled maintenance had been carried out. It offered its deepest condolences to the victims and their families in a social media post, and promised that all due diligence would be taken in finding the causes of the accident.
Lisbon's City Council suspended operations of other streetcars in the city and ordered immediate inspections, local media reported.
President Marcelo Rebelo de Sousa offered his condolences to affected families, and Lisbon Mayor Carlos Moedas said the city was in mourning. "It's a tragedy of the like we've never seen," he said.
Portugal's government announced that a day of national mourning would be observed on Thursday. "A tragic accident ... caused the irreparable loss of human life, which left in mourning their families and dismayed the whole country," it said in a statement.
European Commission President Ursula von der Leyen also sent her condolences. "It is with sadness that I learned of the derailment of the famous Elevador da Gloria," she wrote in Portuguese on X.
The crash reportedly occurred at the start of the evening rush hour, around 6pm. Emergency officials said all victims were pulled out of the wreckage in just over two hours.
An investigation into the causes will begin once the rescue operation is over, the government said.
SITRA, a trade union, wrote in a post on social media that one of its members died in the accident.
Spanish Prime Minister Pedro Sánchez wrote on X that he was "appalled by the terrible accident", while Italian Foreign Minister Antonio Tajani wrote that he had met with the Portuguese foreign minister and expressed his "solidarity with the victims".
The US Embassy Lisbon also offered its "deepest condolences to all affected," according to a post on X.
The streetcar, technically called a funicular, is harnessed by steel cables and can carry more than 40 people, seated and standing. It is also commonly used by Lisbon residents. The service up and down a few hundred metres of a hill on a curved, traffic-free road was inaugurated in 1885.
It is classified as a national monument.
Lisbon hosted around 8.5 million tourists last year, and long lines of tourists typically form for the brief rides on the popular streetcar.
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