Map locates Kamra and Peshawar, Pakistan, where bombs exploded. Pakistani security officials examine the site of a bomb explosion in Peshawar, Pakistan.
Dozens of people have also been injured as heavy smoke went into the sky in the area where the explosion happened.
The heavy blast came just hours after US Secretary of State Hillary Clinton arrived in Pakistan's capital Islamabad for talks over political and military issues.
"At least 43 people have been killed and more than 80 were wounded. We have declared an emergency in the hospital," said doctor Hamid Afridi, the head of the main government-run Lady Reading Hospital in Peshawar.
The death toll is expected to rise as some of the injured were apparently in critical condition.
"We have received 21 dead bodies. A lot of people are injured. We are not in a position to count them," hospital doctor Zafar Iqbal told AFP news agency.
The bombing came as Peshawar has been on high alert since Tuesday as the local government has erected additional pickets on all the entrances and exits of the city, in milieu of country's deteriorating peace situation.
The police have called upon the citizens to fully cooperate with law enforcement agencies.
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