Kandahar is outside the remit of Nato's ongoing Operation Moshtarak
A Nato air strike against suspected insurgents in Kandahar has instead killed five civilians, officials say.
The group was seen digging on a roadside and was thought to be planting bombs, Nato said.
A senior Isaf official said he regretted the loss of life, adding that an investigation was underway.
The incident was unrelated to the ongoing operation against the Taliban in Helmand. A Nato rocket strike there killed 12 civilians on Sunday.
Civilian casualties are particularly sensitive during the joint Nato and Afghan Operation Moshtarak to force the Taliban out of their strongholds in Helmand.
Isaf deputy chief of staff Maj Gen Michael Regner said of the Kandahar deaths: "We regret this tragic accident and offer our sympathies to the families of those killed and injured.
"Our combined forces take every precaution to minimise civilian casualties and we will investigate this incident to determine how this happened."
Civilian building hit
Operation Moshtarak, meaning "together" in the Dari language, is the biggest coalition attack since the Taliban fell in 2001.
The operation is also considered the first big test of US President Barack Obama's new "surge" strategy for Afghanistan.
Nato has stressed that the safety of civilians in the areas targeted is their highest priority.
However, on Sunday two rockets fired from the High Mobility Artillery Rocket System (Himars) in the Marjah area missed their target, hit a building and killed 12 Afghan civilians.
Nato commander Gen Stanley McChrystal said that he "deeply regretted this tragic loss of life".
Gen McChrystal immediately suspended all use of the rocket system involved and Afghan President Hamid Karzai ordered an investigation.