"Two soldiers and one civilian were killed in the blast," Abdul Qadir, a local administration official, told AFP.
Seven other people - one soldier and six civilians - were wounded in the explosion near the bazaar in Ibrahimzai, he said.
A military official in the provincial capital Peshawar confirmed the incident, saying the wounded had been taken to the local hospital.
This is the latest attack in a series of bombings by militants in the northwestern regions in the recent past. The government says the military has scored major gains against Taliban militants in a series of offensives in the lawless tribal areas, including Orakzai, but militants continue to carry out bombings.
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