According to police, the explosion took place on Nowshera Road near a car showroom.
The blast injured three and left several vehicles badly damaged.
The bomb was a homemade explosive.
The bomb disposal squad reached the spot soon after the incident and police have started an investigation.
Last week, a burqa clad female suicide bomber and a handcart bomb killed at least seven people and injured another 42 in the first deadly attacks to hit Peshawar during Ramazan.
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