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Firefighters rushed to the scene after hell ravaged the four-star hotel on popular Naplavni Street.
The death toll is expected to rise as firefighters search the hotel for victims.
Seven other people were reportedly injured, three of them seriously, most suffering from smoke inhalation.
Petr Kolouch, chief of the emergency services in Prague, told Czech state television: “There are two deaths but we fear that this is the final figure.
“Three people have been resuscitated. One has already managed to restore circulation.”
Prague ambulance spokeswoman Jana Postova added: “I can confirm that we were unable to help two people.
“We are treating seven people, three of whom are in serious condition. Two required lung ventilation.”
Around 40 people were evacuated from the hotel in the aftermath of the blaze, which was first reported at 6 p.m. local time (5 p.m. UK time).
The cause of the fire, which started on the ground floor of the hotel and took two hours to be brought under control, is not yet clear.
Writing on Twitter, the mayor of Prague Adriana Krnacova: “I want to thank the firefighters. I express my sincere sympathy to the families of the victims.”
The Eurostars David hotel is located a few blocks from the Vltava River and close to the National Theater in the Czech capital.
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