The bomb was found near Khalid Bin Waleed road in the city's Pakistan Employees Cooperative Housing Society (PECHS) area, where many bank branches, car showrooms and wedding lawns are located.
"We got a tip off about the presence of a suspicious looking sack near a residential apartment on Khalid Bin Waleed road and the Bomb Disposal Squad (BDS) team personnel confirmed it was a 13 kilogramme bomb," senior police official Aamir Farooqi said.
The bomb was defused in Karachi, even as a blast ripped through the fruit and vegetable market on the outskirts of Islamabad killing at least 22 people.
Police also recovered and defused explosive material after a blast on a railway track near the Sarhari railway station in Nawabshah.
The blast took place soon after a passenger train had passed.