The blast came after four Pakistani soldiers and 10 pro-Taliban fighters were killed in an overnight exchange of fire in the north Waziristan region, the military said.
Four members of the security forces were also wounded in the fighting in Dosali area, about 40km south of Miranshah, the main town of the tribal area bordering Afghanistan.
Major-General Waheed Arshad said on Saturday: "The miscreants fired 50 to 60 rockets at five posts before attacking one of the posts with automatic weapons."
The suicide car bomb's devastating blast damaged several vehicles and five shops.
"Human limbs and pieces of flesh were scattered around the site," Mohammad Sajjad, a witness, said.
Violence has intensified in Pakistan, especially in the northwest tribal region, since at least 102 people were killed during an army raid on the Lal Masjid (Red Mosque) in Islambad last month.
At least 220 people have been killed in a surge in violence following the stand-off with religious students and leaders at the mosque last month.
Pro-Taliban Pakistani fighters have abandoned a peace deal in the semi-autonomous tribal region last month, adding to the deteriorating security situation in the country.
The army has erected more check-posts and carried out more patrols in North Waziristan, but it has yet to launch an offensive.
Arshad has said that the latest clash lasted about two hours and militants were seen carrying four to five bodies while fleeing.
Two helicopter gunships were used to pursue the fleeing fighters, an intelligence official said.
Separately, militants fired eight rockets at a security checkpoint near Miran Shah, the main town in North Waziristan, but caused no damage or casualties, the official said.