At least three people were killed and many others sustained injuries in an explosion outside Data Darbar, a major Sufi shrine, here on Wednesday.
The blast targeted a vehicle carrying the Elite Force of Punjab Police, officials said.
Sources from Mayo Hospital, where 18 of the injured are undergoing treatment, told Geo News that three bodies were brought to the hospital following the blast.
Among those injured, four are said to be in critical condition.
No individual or group has claimed responsibility for the blast as yet, which comes as the country marks the holy fasting month of Ramzan.
The 11th-century Data Darbar is among the oldest shrines in South Asia and is visited by thousands every year.
The shrine was targeted in a suicide attack in the year 2010 in which there were many casualties.
Further details are awaited.