Arshad Khan, political tehsildar of Bara region in Khyber Agency, said a group of people had assembled in a 'hujra' (guesthouse) at Dar Jumat Akakhel, a remote area close to the border with Afghanistan, when a huge blast occurred.
Nine persons, including three children, were killed and several others injured, he said.
Khan said a live mortar shell apparently exploded when one of the victims started to play with it.
The identity of the victims could not immediately be ascertained.
Personnel of the Khasadar militia rushed to the spot and sent the bodies to various villages for burial while the injured to were taken to a nearby hospital.