Two intelligence officials also confirmed to AFP that the target was a base of Lashkar e-Islam, which Pakistan has blamed in the past for similar attacks.
'Armed group revival'
Lashkar e-Islam, which means Army of Islam, have staged bombings in the past and are the target of a Pakistani military operation to oust them from Khyber, but intelligence officials blamed warring extremist factions.
"There are two militant groups fighting with each other in Tirah valley. Both of them are attacking each other," one intelligence official said.
"There is a possibility that the rival group attacked the Lashkar-e-Islam base.
"There is no communication system in the area. This is an inaccessible area for us," the official told AFP on condition of anonymity.
Another official suggested the bombing could be a revival of a feud between Lashkar-e-Islam and rivals Ansar-ul-Islam, which means Companions of Islam.
Khyber is part of Pakistan's wild tribal belt on the Afghan border where Taliban and Al-Qaeda-linked fighters have carved out strongholds and in what the United States calls the most dangerous region on earth.
The bombing came as Richard Holbrooke, the special US envoy to Afghanistan and Pakistan, met Yousuf Raza Gilani, the prime minister of Pakistan, in the capital Islamabad.
Barack Obama, the US president, has called on Pakistan to take stronger acting to fight disruption in the region as the United States pours 30,000 more troops into Afghanistan to battle al-Qaeda and Taliban fighters.
Pakistan's security has deteriorated drastically since joining the US "war on terror" in late 2001. At least 3,000 people have been killed in bombings and similar attacks since July 2007.
In a separate incident in NWFP's district of Kohistan, official sources were quoted as saying that a landslide killed at least 36 people.