"We are trying to ascertain the nature of the blast" in Kalaya, a town in Orakzai agency, senior local official Khalid Iqbal told AFP. A second official confirmed the toll.
"According to our initial investigation, it was an improvised explosive device hidden in a carton of vegetables," he said.
Orakzai is one of seven restive semi-autonomous tribal regions on the Afghan border, an area that has long been a focal point in the global war on terror.
Washington has insisted that the region provides safe havens to militants including the Afghan Taliban and Al Qaeda - an allegation that Islamabad denies.
The blast occurred around the same time as three attackers attempted to storm the Chinese Consulate in the southern port city of Karachi in an unrelated incident in which two police officials were killed. The Karachi attack was claimed by the ethnic insurgent Baloch Liberation Army.