According to police, the blast occurred near bus station, close to a car showroom in Jandol Monda area of Dir Lower. 'It was a suicide attack', said DPO Saleem Marwar.
Seven people including Mohammad Akbar (Sufi), a leader of Aman Lashkar, were killed while more than 20 injured in the blast. Police have cordoned off the area. The injured have shifted to hospital.
"We have found the head of the bomber. He appears to be a teenager, a 15 to 16-year-old boy," Marwat said.
The showroom was also damaged in the blast. At the car showroom, three people were among the dead and several vehicles damaged, he added.
No group immediately claimed responsibility.