These hills are the kalabagh top & nathiagali & murree on extreme right. Thandiyani mountain is hidden behind the tree on the left & the top itself is out of the canvas. My guess is that this photo was captured while standing in Supply area (exactly between Abbottabad city & Mandian)
I am not sure but my guess about this building is that it is the old campus of Ayub medical college. Although at the time when this photo was captured, the medical college still had to be established after 49 years. Frankly I don't know what that building was used for prior to that.
Two other probabilites are BurnHall School & Abbottabad Public Scool (former Railway Public Scool in those days)