The blast in Peshawar was the deadliest single attack this year in Pakistan.
Witnesses say the explosion hit a crowded market late in the day, Wednesday, killing mostly women and children. A large fire then broke out, engulfing several shops and spewing a cloud of gray smoke over the area.
Several buildings collapsed. Rescue workers frantically searched for survivors in the debris.
The attack occurred as U.S. Secretary of State Hillary Clinton met with top Pakistani leaders in the capital, Islamabad.
She strongly condemned the attack.
"These attacks on innocent people are cowardly," said Clinton. "They are not courageous. If the people behind these attacks were so sure of their beliefs, let them join the political process." Speaking alongside the Secretary, Pakistani Foreign Minister Shah Mahmood Qureshi had a defiant message for the militants.
"We defeated you in Swat and Malakand," he said. "And the brave soldiers and officers of the Pakistani army will defeat you in Waziristan." Nearly two weeks ago, Pakistan's military launched an offensive in the South Waziristan tribal region against Pakistani Taliban militants based there. Since then, a number of high-profile militant attacks have shocked the nation, including an attack with two suicide bombers on an Islamic university in the capital.
Army officials say the offensive against the militants in Waziristan has been successful with troops gaining control of key areas and killing more than 200 militants. About two-dozen soldiers have been reported to have died.
There is no independent confirmation of the tolls, and the region has been closed to outsiders.
Secretary Clinton is expected to spend the next several days in Pakistan, meeting with senior officials and community leaders in Islamabad and the country's cultural center, Lahore. She has pledged U.S. support in a number of areas, including helping Pakistan repair and upgrade key electricity generating stations as the country faces severe power shortages.
Sean Maroney, VOA news, Islamabad
