The funerals went ahead after residents persuaded the army to halt operations launched amid fierce fighting that has killed some 250 people since Saturday.
The violence is the bloodiest since Pakistan joined the U.S.-led war on terror in 2001 and comes as President Gen. Pervez Musharraf vows to use a new presidential term to step up efforts against extremism.
Some 1,500 people gathered in the village of Epi hoping to bury some 50 people, including women and children, killed in Tuesday's air strikes.
Maulvi Gul Daraz, a Muslim cleric who led the funeral prayers, said they buried only 27 bodies in Epi and moved the others to another village for burial there for fear of more air strikes after helicopters appeared in the sky.
Daraz described Epi as a ghost town whose residents had run for their lives when the bombing began. He said some of the victims were found lying in the street or in the rubble of destroyed houses and shops.
He said scores of injured people of all ages had been taken for treatment to Bannu, a town about 30 miles to the east.
While residents in Mir Ali, a town near Epi, reported a burst of shelling before dawn Wednesday, there was no repeat of the fierce clashes that began Saturday and have sent thousands fleeing for safety.
Ten residents went to the army base in Miran Shah, the region's main town, to ask for relief, said Hafiz Muhammad Wali, a school teacher who led the group.
Military officials "assured us that just for today there would be no action so that the funerals of the locals could be held and the injured treated," Wali told The Associated Press.
Army spokesman Maj. Gen. Waheed Arshad said that while no cease-fire was agreed, "currently there is also nothing untoward happening either."
On Tuesday, residents said air strikes on Epi killing dozens of militants and civilians, including shoppers in its packed bazaar. The army has admitted that, while it only targeted militant positions, some civilians may also have died.
The army says up to 200 militants and 47 troops died, and that scores more were wounded.
Farid Ullah, a resident of Mir Ali, said some 10,000 people from the area had abandoned their homes and, with the army blocking the roads, walked through the mountains to safer towns.
He said 60 of his relatives were among them, but that he was staying behind along with his aging mother.
Pakistan is struggling to contain religious extremists, who are trying to impose a harsh version of Islamic law reminiscent of the former Taliban government in Afghanistan.
A bomb destroyed ten shops selling music discs - frowned on by fundamentalists - in the town of Kohat before dawn on Wednesday, police said. No one was hurt. A similar attack in the city of Peshawar on Tuesday wounded a dozen people.
Pakistan struck a controversial cease-fire deal with militants in North Waziristan. But the deal has unraveled amid continued attacks on security forces in Pakistan and Afghanistan. U.S. officials criticized the pact, claiming it provided a safe haven for al Qaeda and a rear base for Taliban guerrillas.