Also Thursday, the Taliban claimed responsibility for a deadly attack on security forces a day earlier in the eastern city of Lahore.
Bombs mounted on motorcycles tore off walls and shattered windows of a row of small shops in Peshawar's Qissa Khawani bazaar. Television networks showed video of people carrying a bloody body from a shop between mangled and smoking cars.
Senior police officer Zarman Shah Khan said at least six people were killed. A doctor at a nearby hospital, Sahib Gul, said 80 people wounded in the blast had been brought in, many with critical injuries.
"It was a sudden blast and then there was fire all around, a cloud of smoke filled the sky," said Khair Uddin, a shopkeeper whose hands and chest were bloodied by shrapnel from the blast.
Commando units rushed to the scene and engaged in a gunfight with suspected militants who holed up in a building near the market, local police Chief Malik Naveed told reporters. Two gunmen were shot dead and at least one other was arrested.
As the gunfight was under way, a suspected suicide bomber blew up a police checkpoint on the outskirts of the city, killing four police, said police officer Yaseen Khan.
The explosions came a day after a suicide attack on police and intelligence agency offices in Lahore that killed about 30 people and wounded more than 300 others.
Hakimullah Mehsud, a deputy to Pakistani Taliban chief Baitullah Mehsud, told The Associated Press in a telephone call that Wednesday's attack in Lahore was in response to the military's ongoing offensive against militants in the northeastern Swat Valley.
He warned of further attacks in the major cities of Multan, Rawalpindi, Lahore and the capital, Islamabad, and urged civilians to flee.
"Our targets are security forces who are killing innocent people in Swat and other adjoining areas," Mehsud said. "We regret that some innocent people were also killed in the Lahore attack, we did not want that."
In the Lahore attack, gunmen fired and lobbed grenades at offices of the police and top intelligence agency, then detonated an explosive-laden van in a busy street in Pakistan's second-largest city -- a major cultural center and a hub for the armed services.
A little-known group calling itself the Taliban Movement in Punjab has also claimed responsibility for the attack. The claim could not be verified, and the militant group's relationship to the Taliban was unclear.
The attack on Lahore, the capital of the Punjab province, was far from the restive northwestern Afghan border region where the Taliban have established strongholds in the Swat Valley.
The military launched a major offensive in the Swat region late last month after the Taliban seized control of a neighboring district in a bold bid to extend their influence. Washington and other Western allies see the campaign as a test of the Pakistani government's resolve to take on the spread of militancy.
Brig. Tahir Hamid, the commander of military operations in Mingora, the largest town in the Swat Valley, said Thursday the militants had suffered "huge casualties" in the fighting and up to 70 percent of the town was now in government control.
The fighting has ruined villages in the region, prompted more than 2 million people to flee and thousands of others to hunker down under stiff curfew restrictions. Aid officials warn both situations could turn into humanitarian disasters.
The military claims more than 1,000 militants have died in the month-old campaign, though access to the region is restricted and the tally cannot be independently confirmed.
Wednesday's attack was the third since March in Lahore, following deadly assaults on the visiting Sri Lankan cricket team and a police academy. Officials fear militants may be choosing targets there to make the point that nowhere is beyond their reach.
The site was cordoned off Thursday while officials from electricity and public works departments surveyed the damage. Hospital officials said 314 people were taken to three medical centers after the blast. Eighty were still being treated Thursday, including 10 in critical condition.
The government took out ads in several newspapers Thursday listing 21 Taliban leaders -- 18 of them with pictures -- and offering rewards of up to $62,000 for senior Swat Taliban leader Maulana Fazlullah.
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Associated Press writers Babar Dogar in Lahore and Munir Ahmad and Ashraf Khan in Islamabad contributed to this report.
(Copyright 2009 by The Associated Press. All Rights Reserved.)
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