Al Jazeera's Kamal Hyder said: "Because there were so many people and because the attackers threw their grenades indiscriminately, though there is some speculation of a larger explosion, the death toll has been steadily mounting."

A senior security official said the attackers fled into the mountains after the attack in the remote region of Dir district.

Mahmood Khan said no one had claimed responsibility for the attack but last month a meeting of elders in the area had issued a strongly-worded statement against the Taliban and had vowed to act against them entering the area.

"It is a blatant act of terrorism," he said.