The officials identified him as Abdullah Noori, a suspected al-Qaida leader and son of Abdul Qadir, an Algerian identified as bin Laden's top aide, Dawn newspaper reported.
The body was found Wednesday, the report said. Officials said the man was being treated for a kidney ailment by a private physician in a rented house in the Tehkal area of Peshawar, capital of North West Frontier Province, which has been the scene of much militant violence.
Police were quoted as saying the house was raided after they received information that an important militant commander was hiding there.
The report quoted sources as saying the victim's body showed deep cuts, needle pricks on shoulders and wound marks on fingers. A urine bag was attached to the body.
The report said 10 people in the house were arrested, but seven of them were later released. The other three were said to be foreigners, including one Algerian, the report said.