The rockets and mortars fired overnight on Friday did not hit any homes in Hangu, a town about 200km southwest of Islamabad according to the town's mayor.
Ghani ur-Rahman said: "Unknown people from nearby mountains are firing rockets, and troops are trying to control the situation."
Khurshid Anwar, a prominent minority Shiite Muslim cleric said that he believed the rockets were being shot by Sunni Muslims. They were coming from an area where Sunnis live, he said.
"Those who fired rockets and other weapons wanted to target our people, our homes," he said.
A further two people have now died from the blast on Thursday taking the death toll to 30.
The attack occurred during an Ashura procession to mark the Shia mourning month of Muharram. At least 50 people were injured.
Army troops took control of the area and a curfew was imposed as the Shia vented their anger by burning shops and cars.
Police mounted road blocks on the route to Hangu.
Rahman said the situation was under control by early afternoon. He said dozens were injured, although Sunni and Shia leaders were helping to calm the situation.
Soldiers are now enforcing a
curfew in Hangu
The explosion hit a procession of hundreds of people in a bazaar soon after people emerged from the main Shia mosque at mid-morning.
Ashura, the holiest day for Shias, marks the martyrdom of Hussain, a grandson of Prophet Muhammad.
Police have been deployed in force across Pakistan for a number of days before the Ashura ceremony, which is a target of hardliners from the majority Sunni community.
Shias mark the ceremony by publicly wailing and whipping themselves with knives attached to chains.