About 100 people were wounded when the bomb went off near Peshawar’s famed Storytellers Bazaar, wrecking a Shiite Muslim mosque and a hotel and setting a string of vehicles and shops ablaze, according to a local police official.

Neither the motive nor the culprits behind the blast in Peshawar were clear. But provincial government chief Haider Khan Hoti said "external forces" could be to blame.

Meanwhile, a suspected US missile strike reportedly killed three people in a stronghold of the Taliban and al Qaeda near the border with Afghanistan.

Pakistan and the United States have stepped up operations against Taliban and al Qaeda strongholds in the northwest to curb mounting attacks launched from there on targets in Afghanistan and Pakistan.

There have been more than 30 suspected US missile strikes since August, including one on Friday in the North Waziristan region, part of Pakistan's wild tribal belt viewed as possible hiding place for Osama bin Laden.