Police said the blast took place in the city's Turi Bazaar, a crowded marketplace which has in the past been a frequent target of terrorist attacks.
The nature of the blast has not yet been determined. Eyewitnesses told Geo News explosive material may have been hidden in a vegetable cart which went off.
Seventeen people have been brought wounded for treatment, said hospital staff, including a child. Deputy Medical Superintendent (DMS) Parachinar Hospital Dr Qaiser Hasan said that two among the wounded are critically injured.
Leader of the Opposition Shehbaz Sharif strongly condemned the blast, saying "terrorists seek to target citizens and leave Pakistan in the grip of terror".
"The whole nation is united against the enemies of Pakistan," he said.
The PML-N president extended his heartfelt condolences to the affected families and prayed for the early recovery of those injured.
PPP chairman Bilawal Bhutto Zardari also condemned the attack and expressed concern over the rise of such incidents of terrorism in the country.
"Terrorists have been emboldened due to a lack of implementation of the National Action Plan," he said.
Bilawal directed all PPP representatives present in Parachinar to come to the aid of those injured. He demanded that those involved be immediately arrested.
Following the blast, protesters gathered around the press club and staged a demonstration, urging the government to provide better security to the city.
According to Geo News' local correspondent Ali Afzal Afzaal, the Turi bazaar area used to have a single track for vehicular traffic which was recently widened and split to keep apart incoming and outgoing traffic.
Despite similar incidents in the past, vendors selling their wares on carts are a common sight, and the carts are targeted by terrorist elements for such attacks.
Furthermore, such carts are found on both sides of the road and attract large volumes of people.
The year 2017 in particular was a bloody year for Parachinar. The city saw a number of attacks throughout the year, the worst of which were back-to-back blasts on June 23 which left more than 70 dead and at least 300 injured.
This is a developing story and initial facts and figures may be updated as more information is received.
چیئرمین پیپلز پارٹی بلاول بھٹو زرداری کی پارا چنار میں دہشتگردی کی مذمت
— PPP (@MediaCellPPP) July 23, 2020
دہشتگردی کے بڑھتے ہوئے واقعات باعث تشویش ہیں، بلاول بھٹو زرداری
نیشنل ایکشن پلان پر عمل نہ کرنے سے دہشتگردوں کی حوصلہ افزائی ہوئی ہے ، بلاول بھٹو زرداری @BBhuttoZardari
پاکستان مسلم لیگ (ن) کے صدر اور قائد حزب اختلاف شہبازشریف کا طوری بازار پارہ چنار میں دھماکے کی شدید مذمت
— PML(N) (@pmln_org) July 23, 2020
دہشت گرد عام شہریوں کو نشانہ بناکر پاکستان کو دہشت زدہ کرنا چاہتے ہیں
پاکستان کے دشمنوں کے خلاف پوری قوم ایک ہے
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