For distant extragalactic sources of gamma-rays in the PeV (1015 eV) energy range, interactions of the gamma rays with intergalactic diffuse radiation fields with initiate a pair cascade. Depending on the magnetic fields in the vicinity of the source, the cascade can either result in an isotropic halo around an initially beamed source, or remain more or less collimated. Data recorded by the HEGRA system of imaging atmospheric Cherenkov telescopes are used to derive limits on the halo flux from the AGN Mrk 501. This is achieved by comparing the angular distribution of TeV gamma-rays during the 1997 burst phase - where direct photons should dominate - with the distribution during the 1998/99 quiescent state, where a steady-state halo contribution should be most pronounced. The results depend on the assumptions concerning the angular distribution of the halo; limits on the halo flux within 0.5° to 1° from the source range between 0.1% and 1% of the peak burst flux.