The blast took place in the Peshawar Chowk area near the Police Lines. Police officials confirmed the death toll.
Inspector General of Khyber Pakhtunkhwa police, Nasir Khan Durrani said the blast took place near a passenger vehicle. He said the blast appeared to have been carried out using a planted explosive device.
Durrani said that according to initial reports, five kilograms of explosives were used in the blast which were planted in a wooden crate placed on the roadside.
The attack came hours after Pakistan Air Force jets bombed militant hideouts in the tribal area of Khyber killing at least 20 suspected terrorists.