Security officials said three soldiers from the Afghan army and two local elders were killed along with the children, and another 41 people were injured in the attack, which took place on Sunday at a checkpoint near a police and army post and a school.
A spokesman for the radical Islamic Taliban movement said 20 Afghan soldiers had been killed.
The terrorist act has been condemned by Afghan President Hamid Karzai, as well as by NATO, ISAF and United Nations officials.
This year has seen the worst violence in Afghanistan since the overthrow of the Islamic Taliban movement in 2001, and the United States is expected to increase its military presence in the country next year.
Over Sunday in the southern province of Kandahar, two Canadian soldiers, one Afghan army soldier and a translator were killed while on a routine patrol. In a separate incident, two Afghan police died when mine exploded under their vehicle.
In the western Herat province, international soldiers killed a civilian during a house search, a regional official said. Meanwhile, ISAF troops in the eastern Logar Province captured a Taliban commander believed to be involved in organizing an attack on the regional governor, the press service for the International Security Assistance Force in Afghanistan announced,
