The explosion in the town of Hangu triggered riots with enraged Shi'a setting shops on fire. Officials say several people died in shootings.
The top district administrator said more than 50 people were wounded and more than 60 percent of the town's bazaar was burned down in the day of violence.
Security forces were deployed to control the unrest.
Sectarian attacks have in the past marred the festival of Ashura, which commemorates the martyrdom in Iraq of Hussein, a grandson of the Prophet Muhammad, in the 7th century.
(Reuters, AP, AFP)
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