The explosion took place when a convoy of Frontier Corps (FC) was passing through the Saddar Road in Peshawar.
City police chief Ijaz Khan visited the spot of the bombing and told reporters that the target of the attack was brigadier Khalid Javed of the FC but he survived the blast.
"Three people including an FC solider were killed," he said. He said a woman and a child were also among those killed.
Khan said the bomb was planted in another car which was parked on the road.
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Television footage showed the wreckage of the car used for the bombing.
An emergency was declared at Lady Reading hospital here. It was confirmed that the hospital had received three dead bodies.
Among those injured, the condition of three is said to be critical.
Security forces reached the spot soon after the incident, cordoned off the area and started their initial investigation.
Nobody has taken responsibility of the attack but Khan said that the blast could be a reaction to the ongoing 'Zarb-e-Azab' military operation in North Waziristan.
Army in a late night statement said that yesterday army airstrikes killed another 23 militants. The air raids targeted militant hideouts in Bangidar area near Ghulam Khan area of the troubled region.