Two squadron leaders and two trainee pilots died when the two planes collided while participating in flight formation maneuvering training, The Express Tribune reported.
Of the 10 injured on the ground, three were children and one was a woman, police officials said.
One witness said the planes' wings hit each other, touching off a fire and causing them to crash onto two houses below.
"Two PAF trainer aircraft collided midair. Four pilots were killed; two were trainee pilots and two were instructors," district police officer Mohammad Hussain said.
Initial reports indicated the aircraft were a basic training airplane used by the air force.