At least 40 people have died and another 100 wounded in a car bomb blast in a market in Peshawar, Pakistan.

The car was carrying 440 pounds of high explosives when it was detonated in the Qissa Khawani bazaar - the historic 'storytellers' market.

The blast destroyed shops, vehicles and tore through shoppers. It left a crater five-feet deep.

Six children and two women were reported dead.

"When I got up, everything was on fire. Women and children were burning in (a) Suzuki pickup, and a number of vehicles were destroyed, besides the shops (that) were also on fire," a local shopkeeper told CNN.

The Pakistani Taliban have denied involvement in the attack. The Taliban had claimed involvement in two attacks earlier this week.

The Taliban are still suspected of the bombing in a move to derail peace talks between Islamic militants and the government.

Peshawar was also the location of a deadly attack on a Christian church on Monday that killed about 81 people.

The suicide bombing was one of the deadliest attacks on Christians in Pakistan ever, with a splinter group of the Pakistani Taliban taking responsibility.

The group claimed that the violence was in response to US drone strikes in the area.