The shooting took place early Sunday in the district of Panjwaii in southern Kandahar Province.
The US soldier has been reportedly detained following the assault.
The NATO-led International Security Assistance Force (ISAF) in Afghanistan confirmed the incident but did not disclose further details. The motive behind the deadly attack is not known yet. The Western military alliance says it will launch an investigation into the incident.
"This is a deeply regrettable incident and we extend our thoughts and concerns to the families involved,β ISAF said in a statement."
Meanwhile, the Taliban claim that the shooting spree has left at least 50 people, inculding women and children, dead.
Civilian casualties in Afghanistan have been a major source of friction between President Hamid Karzai's government and the US.
The incident came in the wake of recent violent clashes in several provinces of the war-ravaged country over Qurβan burning by the US-led forces, which left over 30 people, including six American soldiers, dead and around 180 others injured.