The explosion took place when a convoy of Frontier Corps (FC) was passing through the Saddar Road in Peshawar in the Khyber Pakhtunkhwa province.
City police chief Ijaz Khan visited the spot of the bombing and told reporters that the target of the attack was brigadier Khalid Javed of the FC but he survived the blast.
"Four people including an FC solider were killed," he said. He said a woman and a child were also among those killed.
Khan said the bomb was planted in another car which was parked on the road.
Gunfire was also reported from the area after the blast and windows of nearby buildings and cars were shattered.
Bomb disposal squad official Shafqat Malik said 45 kilogrammes of explosives were used in the blast. He said mortar shells were also put in with the explosives to increase the impact of the blast.
Television footage showed the wreckage of the car used for the suicide bombing.
An emergency was declared at Lady Reading hospital here. It was confirmed that the hospital had received four dead bodies.
Security forces reached the spot soon after the incident, cordoned off the area and started their initial investigation.
Khyber Pakhtunkhwa Governor Sardar Mehtab Ahmed Khan strongly condemned attack.
President of Awami National Party Asfandyar Wali Khan also condemned the blast.
No one has taken responsibility of the attack but Khan said that the blast could be a reaction to the ongoing 'Zarb-e-Azab' military operation in North Waziristan.
More than 1,000 militants have been killed in the operation.
Army in a late night statement said that yesterday army airstrikes killed another 23 militants. The air raids targeted militant hideouts in Bangidar area near Ghulam Khan area of the troubled region.
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