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Haji Afzal, who was in etekaf in the mosque, was standing near the gate when the bomb was detonated by remote control. He was injured seriously and taken to hospital where he succumbed to the injuries.
Hangu which has suffered severe sectarian clashes since 1998 was again in grip of fear and tension.
Haji Afzal was a popular leader and enjoyed immense respect in religious and political circles because of his role in negotiating and maintaining peace between Shia and Sunni sects.
He headed several peace jirgas and complained that the government was not making serious efforts to defuse sectarian tension in Orakzai and Kurram agencies and Hangu district.
He was among a few leaders who enjoyed widespread respect.
He played an important role in freeing government employees and other people kidnapped by the Tehrik-i-Taliban Pakistan during and after clashes with security forces in Doaba area last year.
Meanwhile, an old enmity claimed three lives when armed men opened fire at the funeral of a man who had died in a suicide attack in the city earlier in the day.
Police said relatives and local people were attending the funeral of the suicide blast victim, Jamil, in Buraqqa area when rivals opened fire.
Jamil's brother, Majeed, and Yar Hussain and Pir Hussain died on the spot. Jamil was selling fruits in Kacha Pakha area when the suicide blast took place.
Police have named Amin, Noori, Nasrullah and Khan Bad Shah in the FIR.
