The bomb was planted in Farooq Shah Market situated opposite a police station in Hangu district of Khyber Pakthunkhwa bordering volatile Kurram agency, police said.
The Bomb Disposal Squad was called in by police and its officials defused the remote control attached with the explosive material.
The bomb contained five kilogrammes of explosives and if it had exploded it would have caused huge destruction.
"The BDS saved the city from massive destruction by timely defusing the explosive material," a police official said.