$string = "Блок1 Блок2 Блок3 'Блок4 с пробелом' Блок5";

function parse($str,$f_delim = ' ',$r_delim = "\n",$qual = "'")
{
   $output = array();
   $row = array();
   $word = '';

   $len = strlen($str);
   $inside = false;

   $skipchars = array($qual,'\\');

   for ($i = 0; $i < $len; ++$i) {
       $c = $str[$i];
       if (!$inside && $c == $f_delim) {
           $row[] = $word;
           $word = '';
       } elseif (!$inside && $c == $r_delim) {
           $row[] = $word;
           $word = '';
           $output[] = $row;
           $row = array();
       } else if ($inside && in_array($c,$skipchars) && ($i+ 1  < $len && $str[$i+ 1 ] == $qual)) {
           $word .= $qual;
           ++$i;
       } else if ($c == $qual) {
           $inside = !$inside;
       } else {
           $word .= $c;
       }
   }

   $row[] = $word;
   $output[] = $row;

   return $output;
}