A preliminary investigation suggests it was a hand grenade attack, according to Geo TV.
"The grenade exploded before it could be lobbed inside the vehicle", Counter-Terrorism Department Head Raja Umar Khattab told reporters, adding that the assailants were "riding on motorcycles".
Among those dead was a 13-year-old boy, who succumbed to his injuries at a hospital. Seven others are undergoing treatment.
The police said the incident could have been the result of a family dispute or an act of terrorism. An investigation is underway.