Police officer Ijaz Ahmad said five children were also injured, three of whom were listed in critical condition, in the blaze in Gujrat about 200 kilometers (120 miles) northwest of Islamabad. The children were aged between 6 and 12, he said.
Earlier, police had blamed an exploding natural gas cylinder for the incident. The bus was powered with both types of fuel.
TV footage showed the charred minibus and victims of the relatives crying outside a hospital.
A schoolgirl told Pakistan's Geo news channel that the driver escaped when the vehicle went up in flames. Authorities said they were trying to track him down and arrest him.
Ahmed said the driver could have saved many lives. "We have been told that he fled from there when the children were crying for help," the officer said.
In a statement, President Asif Ali Zardari expressed "deep shock" over the incident and directed authorities to provide the best medical care to the injured children.
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