But the AFP news agency quoted an official saying the bomb was detonated remotely.

"The bomb was apparently planted in a car parked under a bridge adjoining the market and went off when the place was full of Shia shoppers. It also destroyed several shops," the official was quoted as saying.

"Six people were killed and 12 wounded in the blast," he said.

Increasing violence

Pakistan's army and paramilitary forces do not have a presence  in Orakzai, where security is managed by tribal police.

A local official said that police had cordoned off the scene of the blast and deployed reinforcements.

Further south, police reported fighters armed with guns and rockets killed two
officers manning a checkpoint near the town of Bannu.

Sectarian violence has increased in northwest Pakistan over the past year.

Security analysts say al-Qaeda and Taliban fighters have stirred
up sectarian divisions as they expand their influence through the northwest.

Orakzai has been relatively peaceful over the past year compared with other tribal regions but in October, more than 50 people were killed in a suicide attack at a tribal council called to draw up strategy to evict fighters from the area.

Shias account for about 20 per cent of Pakistan's population.