The Taliban faction who killed at least 70 in Lahore on Sunday have said their target was Christians.

Jamaat-ul-Ahrar, a faction of the Pakistani Taliban, claimed responsibility for the attack late on Sunday night, and issued a direct challenge to the government.

"The target was Christians," said a faction spokesman, Ehsanullah Ehsan. "We want to send this message to Prime Minister Nawaz Sharif that we have entered Lahore."

The attack hit a busy park in the eastern city of Lahore, the powerbase of Prime Minister Nawaz Sharif. Most of those killed were women and children enjoying an Easter weekend outing. Pakistan is a majority-Muslim state but has more than 2 million Christians, making up less than 2 per cent of the population.

It was the deadliest attack in Pakistan since the December 2014 massacre of 134 school children at a military run academy in the city of Peshawar that prompted a big government crackdown on Islamist militancy.

"We must bring the killers of our innocent brothers, sisters and children to justice and will never allow these savage inhumans to over-run our life and liberty," military spokesman Asim Bajwa said in a post on Twitter.

Lahore, markets, schools and courts were closed on Monday as the city mourned.

Rescue services spokeswoman Deeba Shahnaz said at least 70 people were killed and about 340 were wounded, with 25 in serious condition.

The group has claimed responsibility for several big attacks after it split with the main Pakistani Taliban in 2014.

It declared allegiance to the Islamic State but later said it was rejoining the Pakistani Taliban insurgency.

Pakistan has been plagued by militant violence for the last 15 years, since it joined a US-led campaign against Islamist militancy after the September 11 2001, al Qaeda attacks on the United States.

The minority Christian population has been targeted repeatedly alongside the army, police, government and Western interests.

Nearly 80 people were killed in a suicide bomb attack on a church in the northwestern city of Peshawar in 2013.

Earlier on Sunday, hundreds of hard-line Muslim activists clashed with police in the capital, Islamabad, in a protest over the execution of a man they consider a hero for assassinating a governor over his criticism of harsh blasphemy laws.

Mumtaz Qadri Mumtaz shot dead Punjab governor Salman Taseer in 2011. Taseer, a prominent liberal politician, had spoken in support of a Christian woman sentenced to death under the law that mandates capital punishment for insulting Islam or the Prophet Mohammad. Qadri was executed last month.

There was no indication of a connection between the protest in Islamabad and the bomb in Lahore.

Additional reporting from Reuters.