The explosion in the eastern city of Jalalabad also left at least four people wounded and set a nearby petrol station alight, provincial governor spokesman Attaullah Khogyani told AFP.
Eight civilians were among the dead, Khogyani added. Some of the victims were brought to hospital with severe burns, health director Najibullah Kamawal said, confirming the casualty toll.
“I saw a big ball of fire that threw people away. The people were burning,” Esmatullah, who witnessed the incident, told AFP.
There was no immediate claim of responsibility for the latest attack in restive Nangarhar province, which borders Pakistan.
The Islamic State group has claimed a series of high-casualty suicide attacks in the province in recent weeks, as US and Afghan forces continue offensive operations against the group.
While the Taliban is Afghanistan’s largest militant group, IS has a relatively small but potent presence mainly in the east and north of the country.
Tuesday’s attack comes a day after US Secretary of State Mike Pompeo expressed “hope” for peace talks between the Afghan government and Taliban, during an unannounced visit to Kabul.
Pompeo’s first trip to Afghanistan since he was sworn in as America’s top diplomat in April came amid renewed optimism for peace in the war-weary country following last month’s unprecedented ceasefire by the Taliban and Kabul during Eid.
“An element of the progress is the capacity that we now have to believe that there is now hope,” Pompeo told a joint press conference with Afghan President Ashraf Ghani.
“Many of the Taliban now see that they can’t win on the ground militarily. That’s very deeply connected to President Trump’s strategy,” he said, referring to Trump’s much-vaunted South Asia policy announced last August.
The ceasefire did not extend to the IS franchise in Afghanistan, which first emerged in the country in 2014 and established a stronghold in Nangarhar before spreading north.
The most recent attack in Jalalabad on July 1 saw 19 people killed and 21 wounded when a suicide bomber blew himself up in a crowd of Afghan Sikhs and Hindus.
The group had been waiting to meet Ghani when the bomber struck. That came after two separate suicide attacks in Nangarhar during the ceasefire that were also claimed by Daesh.