The blast occurred at a local market of makeshift Khawja Muhammad camp near Hangu city, where people displaced from Orakzai and Kurram tribal district were being put up.
Police said explosives were planted in a motorcycle and were triggered by a remote control device.
An official of Hagnu district police office said the identities of those killed were not known.
"Seven people were killed and another 17 injured," he said on condition of anonymity as he was not authorised to speak to media.
The camp was set up in 2010 when Pakistani army launched an operation against militants in Orakzai and Kurram region, but now people displaced by another operation in North Waziristan were also being put up in the camp.
President Mamnoon Hussain strongly condemned the attack. Expressing his deep sympathies with the bereaved the President called upon the concerned to ensure provision of best medical assistance to the injured.
The President also prayed for courage of the bereaved families to bear their losses with fortitude.
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