Rebel fighters are thought to have set off a bomb inside a tunnel that was underneath the Carlton Citadel Hotel, located close to the medieval souk and citadel in the city.
Activists supporting the opposition said that troops from the government had been based at the hotel and that some were killed.
Both the Syria government and the opposition are attempting to end a stalemate that has lasted for months in Aleppo.
Of recent, rebels have tried to advance on the areas where forces for the government have become entrenched, while areas held by rebels in Aleppo have been under fierce bombardment from the air since the middle of December.
Sana, the official news agency for the state, reported that the “terrorists” blew up tunnels dug under archaeological sites inside the Old City.
Early reports from the bomb area said the hotel suffered tremendous damage, but no casualties had been given.
The Carton Citadel is located inside a building that is 150 years old and faces the entrance to the citadel from the 13th century, which with other parts of the Old City is a World Heritage Site designated by UNESCO.
An activist group based in the UK and called the Syrian Observatory on Human Rights said the hotel has been used by military forces for the government.
The Observatory added that explosions had been set off remotely by the Islamic Front destroying the hotel and causing several other building to collapse.
The human rights organization also said that many militia and security forces loyal to Syria’s President Bashar al-Assad were thought to have been killed in the blast.
The Islamic Front released a statement that said its fighters leveled the hotel, which was a barracks for the government forces and killed more than 50 soldiers.
In the past two years of fighting, the frontlines have not moved though it now seems that the rebels are making incremental advances over recent months.