Bilal Ahmad Faizi, the spokesman for emergency rescue services, said an improvised explosive device (IED) went off on a busy road in Peshawar at 9:10 a.m. (0410 GMT). He said five people, including four children, were injured.
Two of the children were in critical condition, Mohammad Asim, a spokesman for the Lady Reading Hospital in Peshawar, said.
There was no immediate claim of responsibility for the attack.
Peshawar's police chief, Mohammad Ashfaq Anwar, told Reuters that there was no indication school children were the target of the attack.
Peshawar, which straddles the edge of Pakistan's tribal districts bordering Taliban-ruled Afghanistan, is frequently targeted by extremist militant groups including Daesh (ISIL or ISIS) and the Pakistani Taliban.
In 2014, six Taliban militants attacked an army-run academy there and killed 153 people, most of whom were students.