Just one warning - J'aran told about some 'easier' fights in Temple District, but as a warning avoid one there - the Guarded Compound one. Not only will you get your Yang handed to you there, but your Ying and teeth and.. backside on the blue plate as well
Save it for the later time, and meanwhile, indeed, do check the other areas in the city out and do some additional quests. Also check the difficulty setting, you may want - if this is the first time you play BG2 - turn it perhaps down from Core Difficulty as well a bit.