The explosion also wounded 74 people near the livestock market where people were trading sheep cows, goats and other animals in the Bati Kot district outside Jalalabad, Afghan police and health officials said.
Charred and twisted remain of cars that were destroyed in the blast smoldered for hours after the attack on Afghanistan's main road to the nearby Pakistani. A U.S. military vehicle was among the wreckage.
At least eight civilians were killed and 74 others were wounded in the attack, said Ghafoor Khan, the spokesman for the provincial police chief. A U.S. soldier was also killed in the bombing, U.S. military said.
CBS News' Fazul Rahim in Kabul said a witness at the scene of the blast told him at least 10 bodies were laying on the road and many injured people were being rushed from the site. The witness said he could see as many as six vehicles destroyed from where he was standing, some 100 yards from the blast site.
The number of civilians killed in the attack is significantly lower from the one reported initially by the U.S. military, which said 20 civilians had died. The military did not explain the discrepancy and referred calls about the casualties to Afghan authorities.
The soldier's death brings the number of U.S. troops killed in Afghanistan to at least 148, the highest number of troop deaths per year since the U.S.-led invasion in 2001.
There were 111 U.S. military deaths in Afghanistan in the whole of 2007.
Nobody claimed responsibility for the attack. Taliban militants regularly use suicide attackers and car bombs in their assaults against U.S., Afghan and other foreign troops in the country.
The United Nations condemned the attack, saying in a statement that it "inflicted enormous suffering in an otherwise peaceful community."
Separately, two British troops were killed Wednesday in an explosion in southern Afghanistan's restive Helmand province, Britain's Ministry of Defense said in a statement. The Royal Marines' vehicle was struck by an explosive while they were on a patrol with Afghan security forces in the Garmsir district, the statement said.
The deaths bring the number of British personnel who have died in Afghanistan to 124.
More than 5,400 people, of whom nearly 1,000 civilians, have died in insurgency related violence this year, according to a tally compiled by the Associated Press based on figures provided by Afghan and international officials.
Meanwhile, unidentified gunmen kidnapped an Iranian official and killed his bodyguard Thursday morning in an attack near the northwestern Pakistani city of Peshawar, a day after an American aid worker was killed while leaving his home in the same area, reported CBS News' Sami Yousafzai from Peshawar.
Pakistani police and officials at the Iranian embassy confirmed the kidnapping of Hashmatullah Atharzadeh, a commercial attaché at the Iranian Consulate in Peshawar.
Speaking to CBS News' Farhan Bokhari on condition of anonymity, a senior Iranian diplomat said the kidnapping, "has jolted us. We are very concerned about the security and safety of our people in Pakistan."
The diplomat urged Islamabad, "to promptly resolve this matter amicably."
An officer at the local Hayatabad police station told Yousafzai that Atharzadeh was traveling to his office from his home when his vehicle was cut off by armed men. The guard reportedly engaged the attackers and was shot to death.
On Wednesday, gunmen killed American Stephen Vance, who worked for CHF International, a U.S.-based aid group. The group was implementing U.S. government-funded programs to pump $750 million over five years into developing basic infrastructure such as wells and better clinics and roads in the impoverished tribal areas bordering Peshawar.
Vance was attacked as he was being driven from his home to his office in University Town, an upscale area of Peshawar where a top U.S. diplomat narrowly escaped a gun attack a few months ago. Vance's Pakistani driver also was killed.
Afghan Ambassador to Pakistan Abdul Khaliq Farahi was abducted and his driver was killed near Hayatabad on Sept. 22, reported Yousafzai. Farahi is still missing and nothing has been said publicly about his whereabouts.
The latest string of attacks on foreigners in Pakistan's northwest underscores the deteriorating conditions in a region used by al Qaeda and Taliban militants as a staging ground for assaults on U.S. and NATO forces in Afghanistan.
CBS News chief foreign affairs correspondent Lara Logan reports the war President-elect Barack Obama will inherit in Afghanistan includes an insurgency that's, and it's a war that is creeping ever closer to Kabul.
Neither U.S. missile strikes on insurgent targets nor aid efforts in the region appear to have had much impact on stemming the violence.
No one immediately claimed responsibility for Thursday's kidnapping. However, senior Pakistani government officials told Bokhari that their intelligence services were investigating possible links to Pakistan's Taliban movement, which is known to have links with hard-line Sunni Muslim groups, including al Qaeda.
"The list of suspects includes the tehree-e-Taliban (Pakistani Taliban) right at the top," a senior Pakistani security official told CBS News. He said the attack had prompted heightened security around Iranian diplomats in Pakistan.
Predominantly Shiite Iran and Pakistan, which is home to far more Sunni Muslims, have struggled for 15 years to improve their historically shaky relations. But, Iran remains concerned over the activities of largely-Sunni militants in Pakistan - the same fighters who attack U.S. and coalition troops in Afghanistan - who target Shiite mosques, shrines and other sites.