The bomb was detonated near the mosque, which also is not far from the Noor Market, said Mushtaq Ghani, a spokesman for the provincial government. TV footage showed victims being taken away in ambulances and private cars.
Jamaat-ul-Ahrar, a breakaway faction of Pakistani Taliban militants, claimed responsibility. Spokesman Asad Mansoor said in a statement that it was carried out by one of the group's members, Abul Durda, and targeted minority Shiites, considered heretics by the militants.
The blast also damaged vehicles and nearby shops, according to government administrator Zahid Hussain, who also said Shiites were the intended target.
Kamran Ali, hospitalized with a head injury, said he was sitting in his shop when the blast took place.
"My shop partially collapsed and I was unable to move for the next 30 minutes or so, and then residents brought me to hospital," he said. The area was littered with broken glass and spattered blood, he added.
Parachinar is a key town in the Kurram tribal region bordering Afghanistan and has been wracked by sectarian violence. The area once was a stronghold of Pakistani Taliban and Sunni militant groups. Although the army says it has cleared Kurram of militants, violence has continued.
Mansoor and Lashker-e-Jhangvi, another banned Sunni militant group, have claimed responsibility for previous attacks.
Two doctors at the government-run hospital said 22 bodies and more than 70 wounded were brought to the facility. The doctors spoke on condition of anonymity because they were not authorized to talk to the media. Other wounded initially taken to private facilities also were brought to the government hospital.
Sabir Hussain, a hospital official, said the Pakistan army took 40 of the most critically wounded by helicopters to hospitals in the northwestern city of Peshawar, where two people died.