The bomb had been planted inside the shop in the main market in restive Baluchistan province's Qalat town, 150km south of provincial capital Quetta, police chief Chaudhry Yaqoob told AFP.

"Three people including the sweet merchant were killed in the explosion and seven others were injured," Yaqoob said. It was not immediately clear who was behind the blast.

Baluchistan is plagued by tensions between the government and ethnic groups who accuse Islamabad of neglecting their social and economic rights. They are also angry about the government's planned extension of military garrisons in the mineral-rich province.

More than a dozen paramilitary soldiers have been killed in the past month in various attacks in sparsely populated Baluchistan, where rockets have been frequently fired at key natural gas installations.