Police said the bomber was among the 450-strong crowd and detonated his explosives on reaching the main square in the city.
'At least 53 people have been killed,' Quetta Police Chief Ghulam Shabir said, adding that at least 197 people were injured.
A doctor in Quetta's main hospital said the toll of wounded was higher, with more than 80 people receiving treatment for injuries sustained in the attack.
The rally was being held to mark al-Quds day - an international day of solidarity with the Palestinian people.
Earlier, Pakistan's Taliban claimed responsibility for triple bombings at a Shia Muslim procession in the city of Lahore that killed 33 people.
'It's revenge for the killings of innocent Sunnis,' a spokesman for Qari Hussain Mehsud, mentor of the Taliban's suicide bombers, said.
'We also have videos of the fidayeen (bombers) and we may release them,' the spokesman Shakirullah Mehsud said.
Thousands of people have been killed in sectarian violence by militants from majority Sunni and minority Shia sects in Pakistan for over two decades.
Mr Hussain is a senior leader of Tehrik-e-Taliban Pakistan, or Taliban Movement of Pakistan led by Hakimullah Mehsud, who was charged by US prosecutors this week in the plot that killed seven CIA employees at a US base in Afghanistan last December.
The US on Wednesday included TTP in its list of foreign terrorist organisations and announced a reward of up to $5m for information leading to his arrest and another TTP leader, Wali-ur-Rehman.
Pakistan itself had announced 50m rupees each for any information about Mr Hakimullah, Mr Rehman and Mr Hussain.
Commonly known as 'Ustad-e-Fidayeen' or 'the mentor of suicide bombers,' Mr Hussain began his militant career with an anti-Shia group before joining TTP, the main Taliban grouping in Pakistan, which is fighting Pakistani government forces and is also increasingly seen as direct threat to the US.
Al-Qaeda-backed TTP claimed responsibility for the failed bomb plot in New York's Times Square.
The attack in Lahore came as the government is struggling to cope with country's worst floods with millions of people threatened by malnutrition and diseases.
