The blast targeted a convoy of the paramilitary Frontier Corps that was on a routine patrol at Saryab Road, police officials said.
The officials said the bomb, which was hidden in a car parked by the roadside, was triggered by remote control.
Two persons were killed and several injured when the bomb exploded. Several vehicles, including four auto-rickshaws, were destroyed by the blast.
Few cars and auto-rickshaws caught fire at the site after the blast while the injured were taken to the Civil Hospital, where doctors described the condition of several of them as serious.
All the dead and injured were civilians.
Several educational institutions and government offices are located in the area where the blast occurred.
No group has claimed responsibility for the blast till the filing of this news.