Major-General Waheed Arshad, a military spokesman, said 11 civilians and four police officers were killed.
"A man disguised in a burqa got out of an autorickshaw when police stopped the vehicle for a search. He then blew himself up," Asar Isdlam, a local police official told the AFP news agency.
Ameer Hamza Mahsud, the Bannu police chief, also said that an examination of remains "confirmed that it was a male suicide bomber".
Earlier reports had suggested that Pakistan had suffered its first suicide attack by a female bomber.
Suicide operations
A member of the so-called "Pakistan Taliban" movement told Al Jazeera that there were 300 people, including 33 Pakistani women, ready to carry out suicide operations in the region.
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"Pakistan needs a military leader who can control both civil and possible military extremism"
Creative_person01, Islamabad, Pakistan
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A police official said the blast went off near a bus stand and 19 people were also wounded.
Pakistan's military has suffered a string of deadly attacks since a peace treaty with tribal elders broke down and government troops stormed the Red Mosque in Islamabad in July.
Also in Bannu on Monday, more than 20 Pakistan troops went missing, feared kidnapped, after a gunfight.
Abdul Nawaz Khan, district officer of the Bannu frontier force, said more than 100 fighters had surrounded a security post and fired rockets and mortar shells.
Communication with the troops was then lost.
Bannu, a major garrison town near Pakistan's troubled tribal areas on the Afghanistan border, has seen frequent clashes between government troops and fighters loyal to the Taliban and al-Qaeda.