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.
Angered by the attack, some residents were seen chanting slogans against the government. Security forces fired shots in the air to disperse the crowd, according to officials.
Later, mourners returned to the streets carrying the dead in caskets and staged a sit-in near the office of the area administrator. They chanted slogans calling for better security for residents who have been repeated victims of such attacks.
Prime Minister Nawaz Sharif condemned the bombing and vowed to eliminate terrorism.
"The network of terrorists has already been broken and it is our national duty to continue this war until the complete annihilation of the scourge of terrorism from our soil," Sharif said in a statement.
The bombing came hours after state-run media said President Mamnoon Hussain had signed a bill removing the last hurdle for reviving military courts to bring terrorism suspects to trial.
Pakistan's Senate and National Assembly have already passed a constitutional amendment to extend the practice, which has been in place for two years. A previous 2015 amendment established the military courts but expired in January.
The move to use military courts followed the December 2014 Taliban attack on an army-run school in Peshawar that killed 154 people — mostly schoolchildren.
Pakistan lifted a moratorium on the death penalty at that time. Since then, it has executed over 400 people, although most were linked to routine murders.
Meanwhile, the army said it killed a "high-value" Pakistani Taliban leader, Mehmood-ul-Hassan, along with an associate in a raid in the South Waziristan tribal region. In a statement, it said troops also seized a cache of weapons from the hideouts of slain militants, who for years operated from the region to orchestrate attacks.
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