Police said a suicide attacker blew himself up in a hotel crowded with people having lunch.
The provincial police chief, Sharif Virk, said investigators found one of the severed legs of the bomber, with a message taped to it saying that spies for the United States would meet the fate of those killed in the blast.
Peshawar, the capital of Pakistan's volatile North West Frontier Province, has suffered an overspill of violence from tribal regions on the border with Afghanistan.
In January, an apparent suicide bombing killed some 15 people in an attack near a Shi'ite mosque in the city.
Last month, a suicide attack on Pakistan's Interior Minister Aftab Khan Sherpao in the nearby town of Charsadda killed 28 people.
Sherpao was slightly hurt in the blast,
(Compiled from agency reports)
A Pakistani tribesman patrols near Wana in South Waziristan (AFP)
NO MAN'S LAND. Fighting erupted in March involving tribesmen in Pakistan's fiercely independent western regions, where reports suggest locally backed offensives targetted Uzbek and other foreign Taliban sympathizers.