Pakistan army helicopters fired missiles killing three militants on Sunday, officials said, in apparent retaliation for a Taliban bomb attack that killed 20 soldiers in the restive northwest.

The helicopters fired at a road in the village of Musaki situated in the same tribal region as the bombing earlier Sunday, intelligence and civil administration officials said.

One of the missiles struck a nearby house, killing a five-year-old girl and a seven-year-old boy, a local administration official added, although security officials could not confirm the civilian casualties.

The bombing earlier Sunday, claimed by the Pakistani Taliban, killed 20 soldiers and wounded 30 when it ripped through a military convoy.

The attack, one of the deadliest to hit Pakistani security forces in recent years, happened in the city of Bannu near the North Waziristan tribal region which is a stronghold of militants linked to the Taliban and Al-Qaeda.

"A vehicle-borne improvised explosive device caused the blast," a senior military official told AFP, adding the exact circumstances were unclear.

An official statement said 20 soldiers were killed and 30 injured in the attack, which hit one of the vehicles in the convoy at 8:45 am.

The convoy was about to leave for the town of Razmak in North Waziristan when the blast hit one of the civilian vehicles hired to move troops.

Taliban 'ready for talks'

Tehreek-e-Taliban Pakistan spokesman Shahidullah Shahid claimed responsibility for the convoy bombing.

"It was part of our fight against a secular system," he said by telephone from an undisclosed location.

"We will carry out more such attacks in future," he said, adding the Taliban were seeking revenge for the deaths of their former chief Hakimullah Mehsud and deputy Waliur Rehman -- both killed in US drone attacks.

The Taliban vowed they would not engage in any dialogue with the government of Prime Minister Nawaz Sharif following the death of Mehsud.

But Shahid told AFP Sunday the group "is ready for meaningful negotiations despite facing huge leadership losses, if the government proves its authority and sincerity" by halting drone attacks and withdrawing troops from tribal areas.

Taliban insurgents have led a bloody campaign against the Pakistani state since 2007, staging hundreds of attacks on security forces and government targets.

An eyewitness told AFP by telephone the vehicle hit by Sunday's bomb was transformed into scorched metal.

"I collected human remains including hands and legs from the site after the attack," he said on condition of anonymity.

Body parts and soldiers' personal belongings littered the scene.

Prime Minister Nawaz Sharif condemned the attack, adding he would cancel a planned visit to the World Economic Forum in Davos, Switzerland in the wake of a recent spike in terrorism.

"Our nation is united against extremism and terrorism and the sacrifices rendered by our citizens and personnel of law enforcing agencies will not go in vain," he said, according to a statement by his office.

'Demoralising attack'

Pakistani troops have for years been battling the Taliban and other homegrown insurgents in the tribal belt next to the Afghan border, which Washington considers the main hub of militants plotting attacks on the West and in Afghanistan.

The army's headquarters in Rawalpindi came under attack in 2009, while major naval and air force bases have also been targeted in battles that have lasted for several hours.

A senior Pakistani general was killed in a blast last September along with two other soldiers in an attack claimed by the Taliban.

In May 2011 89 paramilitary troops were killed in an attack at a military academy in the northwestern town of Charsadda.

Talat Masood, a retired general and security analyst, said recent assaults on the army were "testing the patience of the military" and were "extremely demoralising".

The civilian government led by Sharif, who came to power after elections last year, has said it is seeking talks with the Taliban.

But so far little progress has been seen and terror attacks rose 20 percent in 2013 according to the independent Pakistan Institute for Peace Studies.

Masood said the government's policy was creating frustration within the army.

"It is becoming so evident to people that the government is so ineffective and paralysed and has no policy or strategy, while the army's hands are tied and it is being targeted and not being allowed to take action."

Pakistan, which joined the US-led "war on terror" in 2001, says more than 40,000 people have been killed in the country since then by militants who oppose Islamabad's US alliance.