The blast took place near the residence of a convicted militant leader Hafiz Saeed linked to the 2008 Mumbai terrorist attacks that killed 166 people.
Last year, Pakistan sentenced Saeed to 15 years in prison in a terror-financing case, but he was never charged in connection with the Mumbai attacks.
It is reported that Saeed, who has been serving his term at home under a government order, was unharmed in this attack.
According to Pakistan's Punjab province's Law Minister Basharat Raja, ten suspects have been taken into custody in connection with the blast so far.
"Three more suspects have been arrested from Lahore, Sheikhupura and Peshawar in connection with the Lahore blast on the information of the main suspect -- Peter Paul David," a security official told PTI.
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