CBS News' Farhan Bokhari reports that the attack took place around midday during a prayer gathering in Chakwal, just over two hours' driving distance from the Pakistani capital, when the attacker walked up to the front entrance and blew himself up.
"We have ordered strict security at places of worship for Shia Muslims," said a senior Pakistani government official who spoke to CBS News on condition of anonymity after the attack.
Fedayeen al-Islam, a little-known group believed linked to the Taliban, claimed responsibility through a spokesman.
Separately, a senior Pakistan Taliban commander claimed responsibility for Saturday's another suicide bomb attack in an upper class residential neighborhood of Islamabad that killed at least eight paramilitary soldiers, saying it was in retaliation for U.S. drone missile strikes against militants in Pakistan near the Afghan border.
Pakistan has a history of sectarian violence that often involves attacks by Sunni extremists on minority Shiites.
Sunday's suicide bomber set off his explosives at the entrance to a mosque in Chakwal city in Punjab province, about 50 miles south of Islamabad, during a religious congregation, said Nadim Hasan Asif, a top security official in Punjab. He said the blast killed 22 people and injured more than 30.
"The suspected man was stopped at the entrance and pushed himself in and exploded," Asif said.
Another police officer, Nasir Khan Durrani, said the attack could have been much worse. "Had he succeeded in exploding inside it could have caused a much bigger loss because there were hundreds of people inside," Durrani said.
Chaudhry Nasrullah, the top health official in Chakwal, confirmed that 22 people were killed and that more than 50 were injured, a dozen of them critically. He appealed to the government to send helicopters to evacuate the most seriously wounded.
Farid Ali, who left the mosque just before the attack occurred, said he felt the blast on his back and looked back and saw smoke and dust. "I saw several people lying dead," he told Express News TV. "There was blood everywhere."
Local television footage showed pools of blood on the road in front of the mosque. Torn clothes and a pair of shoes also littered the ground. Police investigators were shown collecting evidence, not far from a car and four motorcycles that were damaged by the blast.
A policeman with both his legs bandaged and another wounded man whose shirt was stained with blood were shown on hospital beds crying in pain. A woman standing in the emergency ward of the hospital wailed, "Oh my God. Oh my God."
Prime Minister Yousuf Raza Gilani condemned the attack, saying it was masterminded by people who are against the state and want to give Islam a bad name.
Western diplomats stationed in the capital warned that Sunday's mosque bombing could be followed by more such attacks.
In the past 30 years, members of hardliners belonging to Sunni Muslims, the majority Muslim sect in Pakistan, have periodically been blamed for attacks on upon the Shia minority.
Such violence is indicative of an increasing breakdown of security across Pakistan. But it is also linked to the internal situation in Pakistan where Sunni-majority Saudi Arabia and Shia-majority Iran (the two dominant Muslim countries in the surrounding region) have tried to gain as much support as possible within Pakistan.
Such past antagonism by the two countries has been widely seen in Pakistan as essentially a turf war.
A senior Western diplomat based in Islamabad and familiar with the history of Pakistan and the Middle East said there was an ongoing tussle between groups in Pakistan who are linked to either Iran or Saudi Arabia.
"At a time when Pakistan's internal security conditions are increasingly precarious, maybe this is when foreign powers like the Saudis or the Iranians want to exploit this situation," said the diplomat who spoke to CBS News on condition of anonymity.
Most of the militant attacks in Pakistan take place in the area near the Afghan border, where Taliban and al Qaeda militants have established bases and often strike U.S. and NATO forces in Afghanistan.
Late last month, a suicide bomber blew up in a packed mosque near the Afghan border at the climax of a Friday prayer service, killing 48 people and wounding scores more in the worst attack to hit Pakistan this year.
But militants have also stepped up attacks in Pakistan's interior.
A man identified as Umar Farooq who says he speaks for the shadowy militant organization Fedayeen al-Islam told The Associated Press via telephone Sunday that the group had staged the attack on the mosque as part of a "campaign against infidels."
He also warned the U.S. to stop its drone-fired missile strikes on militant targets in Pakistan's northwest.
Little is known of the group, but it is believed linked to the Pakistani Taliban. In the past it has claimed responsibility for other attacks, including the bombing of Islamabad's Marriott Hotel.
Pakistani Taliban chief Baitullah Mehsud has said his group was behind the attack on the police academy, which killed 12 people, including seven police. He vowed to carry out more attacks unless the U.S. stopped the missile strikes.
The drone attacks have continued.
One of Mehsud's deputies, Hakimullah Mehsud, told the AP that the Pakistani Taliban carried out the suicide attack against the paramilitary camp in Islamabad on Saturday.
He said the attack was in retaliation for U.S. drone strikes and the group would carry out two suicide attacks per week in Pakistan. He had warned last week that militants would soon strike Islamabad.
Separately Sunday, officials said the number of illegal migrants who died in Pakistan's southwestern Baluchistan province after being cooped up in a metal shipping container was lower than first reported. The toll was 48, not 62, police official Khalid Masood said.
Another 52 - most of them Afghans apparently trying to reach Iran - were hospitalized after their discovery Saturday. Ten more are missing, he said.