The blast occurred in the crowded bazar at Landi Kotal town of Khyber tribal agency.
At least two security officials were among the five people injured, officials were quoted as saying by TV news channels.
There were reports of firing following the blast.
Security forces cordoned off the area after the explosion and the market closed down.
The Pakistan-Afghanistan highway too was closed after the attack.
The highway running through Khyber is the main route for convoys ferrying supplies and fuel to US and NATO forces in neighbouring Afghanistan.
The tribal region and neighbouring Peshawar city have witnessed in recent times several attacks blamed on the Pakistani Taliban.
Published 17 September 2011, 08:32 IST