A tenuous cease-fire has halted Taliban-Army fighting, as negotiations for a permanent deal continue.
The move came shortly after a Taliban group in the nearby Bajur region declared a unilateral cease-fire.
City officials fear Pakistan's commercial capital could be paralyzed if militants become more unified.
More than 300,000 people have fled their homes as fighting worsens between security forces and militants.
Government strategy has been ineffective, and officials are preoccupied with bid to oust Musharraf.
Marking the anniversary of a government operation against the radical Red Mosque, the attack suggests some militants are growing bolder.
In a switch from its efforts to negotiate, the three-month-old government launched an offensive in the North West Frontier Province amid a growing threat to a major city.