Police said security arrangements were being made in Sulemankhel, a suburb of Peshawar, for the funeral of Mian Mushtaq, a leader of the secular leaning Awami National Party (ANP) who was gunned down with two others yesterday.
A police van was transporting a walkthrough gate to the venue when the explosion occurred, injuring a policeman.
Over two kilograms of explosives were used in the remote-controlled bomb, Deputy Superintendent of Police Faisal Wahid told reporters.
Funeral prayers for Mushtaq were offered in the afternoon.
The ANP, a staunch critic of the Taliban, ruled Khyber-Pakhtunkhwa till last year. Dozens of its activists and leaders have been killed by the Taliban in recent years.