The cause of the blast was not immediately known; however officials said it occurred shortly after Afghan and U.S. troops carried out a raid against the Taliban.
A spokesman for Wardak's governor said seven people were killed in the explosion. The New York Times said residents pegged the number of deaths at 16.
The Times said the village was located in the Tangi Valley, an area that has been a Taliban stronghold and the scene of repeated battles between the militants and international forces.
A special-operations unit swept into the village early Sunday and captured a suspected Taliban commander. The commandos then came under fire from gunmen holed up in a mosque.
Four Taliban were killed in the engagement, some of whom were equipped with explosive suicide vests.
"Some civilians were trying to collect the bodies or to get their weapons and other ammunition when suddenly a huge explosion took place and resulted in civilian casualties but we don't know the exact numbers," said Lt. Col. Hagen Messer, a spokesman for the international force.