Additional security forces and rescue teams rushed to the site and took the bodies and injured were shifted to Lady Reading Hospital, where an emergency was declared. Officials said 32 people were being treated in the hospital.
Earlier in the day, a prominent Shia leader was shot dead in the city in an apparent sectarian attack.
There has been a sharp rise in sectarian violence in Pakistan since a deadly clash between Sunnis and Shias in Rawalpindi in November.
Provincial Governor Shaukatullah Khan and Chief Minister Pervez Khattak condemned the blast, which occurred at a time when the federal government and the Taliban are preparing for peace talks.
