A passenger train smashed into a cargo train on the edge of Pakistan's financial capital Karachi on Tuesday killing 16 people, including women and children, authorities said.

"We have received two more dead bodies. With this, now I can confirm that 16 people are dead, including three children and three women. There are more than 45 injured," Doctor Seemi Jamali of Jinnah Hospital told AFP. Most of the casualties had been travelling in the passenger train.

Police and rescue workers said they were still working to retrieve bodies and survivors from the wreckage of the passenger train hours after the crash.

The accident took place at Juma Goth, in the suburbs of Karachi, when the driver of the Karachi-bound Allama Iqbal passenger express ignored a traffic signal and collided with the goods train, senior railway official Aftab Memon said.

Most of the casualties occurred in one passenger coach of the train, which was coming from the eastern city of Lahore, he said.

Pakistan suffered its worst train disaster in more than a decade in 2005 when three trains ploughed into each other in southern Sindh province, killing around 150 people. More than 350 people were killed in a 1990 train smash.