The explosives were planted near the Panj Peer shrine on the outskirts of the northwestern city, which runs into Pakistan`s tribal belt strongholds of Taliban and Al-Qaeda.
"Three people have died and 21 are wounded," police official Asif Iqbal told AFP.
The dead included a five-year-old boy and a four-year-old girl who had come with their parents, he added.
"The bomb was planted in a donkey cart parked near the shrine," he said. The donkey, whose front legs were tied with a rope, was blown to pieces, he said.
The device was fitted with a timer and carried between eight and 10 kilogrammes of explosives, he said.
Worshippers had gathered for a weekly event at the shrine, normally held on Thursday evenings, when the bomb detonated.
"It appears that the target was the worshippers who were gathered here," another police officer Tahir Ayub said.
The shrine houses the graves of several Sufi saints. The tomb of popular Pashto poet Rahman Baba is also located near the Panj Peer shrine.
There was no immediate claim of responsibility but Islamist militants such as the Taliban vehemently oppose Sufi worshippers, who follow a mystical strain of Islam.
According to an AFP tally, attacks blamed on Islamist bombers have killed more than 5,000 people in Pakistan since government troops raided an extremist mosque in the capital Islamabad five years ago.
Pakistan says 35,000 people have been killed by terrorism in the country since the start of the US-led war on Al-Qaeda after the 9/11 attacks on the United States. (*)
Editor: Kunto Wibisono
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