A suicide car bomb tore through a Pakistan market, killing 33 people and trapping victims under smashed shops on Friday as families bought supplies for a major religious festival, police said.

The explosion flung body parts across the bazaar and gutted shops in Ustarzai, a small mainly Shiite northwest town which lies between the garrison city of Kohat and Hangu, another town with a history of sectarian unrest.

A spokesman for the little known Lashkar-i-Jhangvi al Almi militant group claimed the attack. Northwest Pakistan is rife with sectarian violence and Islamist militants, branded by the United States as an existential threat.

The area was packed with shoppers buying food and delicacies for the weekend and the Muslim Eid al-Fitr holiday, which Pakistanis expect to start on Monday with the sighting of the new moon after the fasting month of Ramadan.

Bodies lay on the road and casualties were trapped under the debris from shops that caved in after the blast when the bomber rammed a jeep packed with 150 kilograms of explosives into another vehicle, police said.

"I was standing in front of my shop when all of a sudden, a car blew up outside a restaurant. I went unconscious. I don't remember anything else. When I came round, I was in hospital," said shopkeeper Sohail Ahmad.

Police spokesman Fazal Naeem in nearby Kohat said 33 people were killed and 56 others were wounded.

"There are 33 dead and more than 50 injured. Twenty-five have been identified while the rest are in a very bad condition. The bodies have been completely damaged," said a North West Frontier Province police spokesman.

Police said the bomber came from the nearby Orakzai, the home of Pakistan's new Taliban chief Hakimullah Mehsud who has vowed to avenge the death of his predecessor Baitullah Mehsud, who was killed in a US drone strike.

"This is a Shiite-dominated area and we cannot rule out the possibility that this was a sectarian-motivated attack," said police officer Ali Hasan.

Shiites account for about 20 percent of Pakistan's mostly Sunni Muslim population of 167-million. More than 4000 people have died in outbreaks of sectarian violence since the late 1980s.

UN Secretary General Ban Ki-moon condemned the attack as "indiscriminate and reprehensible" while President Asif Ali Zardari stressed Pakistan was determined not to let Islamist extremists use the country as a launch pad.

"All I can say is that we are doing what we can. It is not something that can be done overnight," said Zardari, whose wife former prime minister Benazir Bhutto was killed in a December 2007 gun and suicide attack.

"We urge the world to provide us with law enforcement and counter-terrorism capabilities," said Zardari during a speech in London.

In Hangu, the Sunni district mayor Khan Afzal was killed and three people wounded when a bomb exploded outside a mosque as he said prayers for the Muslim fasting month of Ramadan, police said.

Near Kohat, gunmen ambushed a funeral procession for a Sunni man killed in the suicide car bombing and shot dead three mourners in what the provincial government suggested may have been a personal vendetta.

Pakistan claims to have cleared the Taliban from the northwestern districts of Buner, Lower Dir and Swat after a blistering assault when militants advanced to within 100 kilometres of the capital Islamabad.

Government troops have also launched military operations against a local Taliban-linked warlord in the semi-autonomous Khyber tribal region, which lies on the main supply route for Western troops in neighbouring Afghanistan.

Pakistani helicopters attacked rebel hideouts in Khyber and Orakzai on Friday, killing 13 militants and destroying two hideouts, the paramilitary Frontier Corps said.

The United States says Islamist fighters are hiding in the Pakistani mountains near the Afghan border, plotting attacks on Western targets and crossing the porous frontier to attack foreign troops in Afghanistan.

Taliban and Al-Qaeda rebels fled Afghanistan after the 2001 US-led invasion, carving out boltholes and training camps in Pakistan's remote mountains.