Police official Sardar Zulfiqar said it was a suicide bombing and that some security personnel were believed to be among the dead.
The Sunday blast was one of the deadliest attacks to target the country's forces as they battle insurgents in its volatile frontier.
No one has claimed responsibility for the blast in Rawalpindi. However, considering that it happened in the middle of an area home to many military installations and buildings it could be seen as an assault against the country's military.
Prime Minister Nawaz Sharif, elected last May, has called for ending the fighting through peace talks. But so far the Pakistani Taliban has shown little desire to negotiate with the government and ruled out talks after a U.S. drone strike killed leader Hakimullah Mehsud in November 2013.
The militants have accused Pakistan of helping the U.S. target Mehsud. Islamabad denied the allegation and accused Washington of sabotaging the nascent peace talks.
Mehsud's replacement, Mullah Fazlullah, is not seen as a supporter of peace talks. Fazlullah is known as a particularly ruthless militant who planned the failed assassination targeting teenage activist Malala Yousafzai in 2012.