Authorities did not identify the victims or disclose their nationalities, but said some foreign nationals were among the dead. Five people were gravely injured, the spokesperson said.
Footage from the site showed the destroyed yellow tram-like funicular, which carries people up and down a steep hillside in the Portuguese capital. Emergency workers were pulling people out of the wreckage.
Police investigators were inspecting the site and the prosecutor general's office said it would open a formal investigation, as is customary in public transport accidents.
It is one of three funicular lines operated by the municipal public transport company Carris and is used by tourists as well as local residents.
The Gloria line transports around 3 million people annually, according to the town hall.
The car at the bottom of the line was apparently undamaged, but video from bystanders aired by CNN Portugal showed it jolting violently when the other one derailed and several passengers jumping out of its windows and people shouting.
Portugal, and Lisbon in particular, has experienced a tourism boom in the past decade, with visitors cramming the popular downtown area in the summer months. - Reuters
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