Reports suggest that a suicide bomber blew himself up at the general bus stand near Sohrab chowk. The target of the attack was reportedly a security convoy.
The area where the attack took place was one of the more crowded areas of the city where a peace festival to celebrate the end of the military operation was underway. Many tourists were in Swat valley for this festival.
Earlier there were reports that two suicide bombers were to carry out attacks soon, and there is speculation that this may have been one of the targets.
Security forces have cordoned off the area of the blast and the injured have been shifted to nearby hospitals.
It was the first such attack in the northwestern district since May and underscored prevailing insecurity in a region that was until last year had been largely outside government control and paralysed by Taliban militants. Television footage showed volunteers carrying a body away from the blast scene, while others frantically pulled at the twisted car doors to rescue other victims in a street littered with burnt out vehicles.
For two years the Taliban paralysed much of the Swat district by promoting a repressive brand of Islamic law, opposing secular girls' education and beheading opponents, until the government ordered in thousands of troops.
In April 2009, Pakistan launched a major offensive in the neighbouring districts of Buner and Lower Dir, then advanced through Swat. After heavy fighting that displaced an estimated two million people, the military declared the region back under army control last summer and tentative efforts have begun to kickstart development and revive the economy.
Many of the displaced have now returned to their homes to rebuild their lives, but skirmishes, threats and tensions have remained. On May 1, a suicide bomber blew himself up at the entrance to a busy market in Mingora, killing three people and wounding 12 others. Similarly lastFebruary, a similar attack killed nine people.
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