The incident occurred yesterday as US soldiers were patrolling in the Islamic State-stronghold of Achin in Nangarhar province, according to Hakim Khan, a commander of the government militia involved in the incident.
He said there had been a "shooting incident" after which US forces conducted an airstrike targeting the militia.
Khan said at least 13 fighters were killed in the airstrike, though other sources gave conflicting figures. An AFP reporter saw at least eight militia fighters buried on Friday morning.
NATO's Resolute Support mission in Afghanistan did not immediately confirm there had been an airstrike, but did say there had been an "active ground engagement".
It denied reports from local sources saying that American soldiers were among the dead.
"One US service member was wounded and is in stable condition at a medical treatment facility," said spokesman Captain Tom Gresback. He did not disclose which branch of the military the troops were from.
Two sources -- Malik Amin, a local neighbourhood representative, and a militia fighter who survived the aerial bombardment -- told AFP that the airstrike came after an "infiltrator" in the militia shot at the American troops.
So-called "green-on-blue" attacks in which Afghan forces turn on their comrades or their Western counterparts have been a major problem during NATO's long years in Afghanistan.
Western officials say most insider attacks stem from personal grudges and cultural misunderstandings rather than insurgent plots.
While Afghan security forces are conducting most of the fighting against IS and Taliban militants, US troops operate alongside them in a training capacity and are frequently on the front lines.
Achin is the same district where a US soldier was killed and four others wounded during a New Year's Day combat operation.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)