The fire, reportedly caused by short-circuited electrical wiring in a shop, destroyed millions of rupees' worth of merchandise, Dawn news reported.
The blaze started sometime after 11pm last night and rapidly engulfed the entire bazaar, Jhelum Valley's deputy commissioner, Abdul Hameed Kiani, said.
Since nearly all affected structures were made from Deodar wood and connected with each other, the fire spread rapidly even as owners watched their belongings reduced to ashes, he said.
Leepa Valley is located east of Muzaffarabad, the capital of PoK.
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Kiani said apart from shops, six houses, three vehicles and four motorbikes were also gutted by the blaze.
A state-owned food depot, where 1,400 tonnes of wheat flour had been stored, was also burnt to the ground, Kiani said at a press conference. A mosque was also partially damaged.
Kiani said that before the winter season in the valley, residents and shopkeepers stockpile food items and other necessities to last until April, when snow melts, allowing vehicular movement.
Kiani said that relief parties could not be sent to the affected area on Monday due to inclement weather.
"Financial compensation and other rescue and relief- related activities can be carried out only after the weather improves," he said, adding that authorities will airlift food items to the area.