The latest assaults on Pakistan's police and intelligence agents come with the military pressing its most ambitious offensive to date against homegrown Taliban networks in the lawless tribal belt on the Afghan border.
The Inter Services Intelligence (ISI) building in the northwestern city was heavily damaged in the blast, with huge clouds of smoke spewing into the sky and debris littering the ground, witnesses said.
The building was almost destroyed and the road littered with debris and tree trunks ripped off by the force of the explosion in Peshawar, which lies on the edge of Pakistan's lawless tribal belt infested with Al-Qaeda and Taliban.
The United States has put Pakistan on the frontline of its war against Al-Qaeda and has been increasingly disturbed by deteriorating security in the country where attacks and bombings have killed about 2,500 people in 28 months.
Most of them were civilians, he added.
A doctor at the city's main Lady Reading Hospital confirmed the casualties.
A security official said it was a bomb blast, but it was not immediately clear whether the explosives were planted in a vehicle, elsewhere, or detonated by a suicide bomber.
An AFP reporter saw at three bodies lying on the ground, but soldiers opened fire into the air preventing other people from approaching until army vehicles arrived and cordoned off the area.
Television footage showed scenes of panic at one hospital, with blood-stained men being admitted and relatives starting to gather outside.
A second bomb ripped through a suburban police station in the garrison city of Bannu, southwest of Peshawar, killing three policemen and wounding five others, police said.
"It appears to be a suicide attack, Bakakhel police station building has been damaged very badly, three policemen are dead and five others are injured," local police official Hameed Khan told AFP.
Peshawar, which runs into Pakistan's lawless tribal belt where US officials say Al-Qaeda are plotting attacks on the West and where Pakistani troops are pressing a major anti-Taliban offensive, is frequently hit by attacks.
The most devastating bomb attack in Pakistan in two years killed at least 118 people in a crowded market of Peshawar on October 28 as militants put ordinary civilians firmly in the crosshairs of their bloody campaign.
Pakistan's powerful and shadowy intelligence agencies have a history of supporting Islamist groups in a bid to counter rival India, but militant attacks have increasingly focused on domestic targets in the last two years.
Friday's Peshawar bombing was the first major attack outside an ISI installation since May, when a suicide attack on a police building in the city of Lahore killed 24 people beside its Punjab provincial headquarters.
The government blames increasing attacks on Tehreek-e-Taliban Pakistan (TTP), which is the target of the ongoing offensive and which wants to avenge the killing of their leader Baitullah Mehsud by a US missile in August.
Today's bombing comes after stiff Taliban resistance killed at least 17 Pakistani soldiers Thursday in the military's deadliest day since launching a major offensive in South Waziristan, security officials said.
Pakistan has pressed around 30,000 forces, backed by war planes and attack helicopters, into battle in a US-endorsed mission to wipe out the chief strongholds of Tehreek-e-Taliban in the tribal district of South Waziristan.
On Tuesday, a Taliban spokesman told AFP by telephone from an undisclosed location that the militia had embarked on a guerrilla war from the mountains of South Waziristan and would attack cities as a matter of course.
"The attacks in cities are a part of our permanent strategy. These attacks will continue and we will attack everyone who wants to harm us," said the spokesman, Azam Tariq.
Source: The Australian