The explosion -- which sent plumes of dark smoke into the sky and destroyed many shops outside a police station in the historic Qissa Khawani market -- injured some 75 people, said Dr. Arshad Javed, executive director at Peshawar's Lady Reading Hospital.
Six women and four children were among the dead, Javed added.
There was no immediate claim of responsibility.
The bomb that went off Sunday was some 300 yards from the All Saints Church, which was the scene of carnage just a week earlier. A bomb at the church in western Pakistan killed more than 80 people, one of the deadliest attack on Christians in the predominantly Muslim country.
On Friday, 19 people died when a bomb hit a bus carrying government employees home for the weekend in Peshawar's outskirts....
Taliban militants have rejected Pakistan's constitution and call for the implementation of Islamic law and for war with India. Sharif and his Indian counterpart Manmohan Singh on are due to meet the sidelines of the United Nations General Assembly on Sunday.