Nato airstrikes have reportedly killed 14 Afghan civilians
The tragedy happened in Nawzad district in southwest Helmand province late on Saturday.
Dawood Ahmadi, a spokesman for the provincial government, said Nato was targeting insurgents but instead struck two homes, killing two women, five girls and seven boys.
Coalition officials later said the insurgents took over a compound which housed the civilians.
My house was bombarded in the middle of the night and my children were killed. The Taliban were far away from my home, why was my house bombed?
Distraught Afghan father Noor Agha
Some of the children were under two years old. A further six people were reportedly injured in the bombardment.
Distraught father Noor Agha said: "My house was bombarded in the middle of the night and my children were killed. The Taliban were far away from my home, why was my house bombed?"
The strike apparently followed an attack by militants on a US Marine base in Nawzad earlier on Saturday.
Helmand Province has been home to some of the bloodiest conflicts in recent years
The deaths have been condemned by Afghan president Hamid Karzai who said he had warned US and Nato troops that their "arbitrary operations" were killing innocent people every day.
He said in a statement the incident was "a big mistake". He added: "It shows that attention is not being paid."
International Security Assistance Force Commander Regional Command South West Major General John Toolan said: "On behalf of the coalition, I offer our heartfelt apologies to the families and friends of those killed.
"I ask that the Afghan people continue to trust and assist their security forces, so that together we can stop the senseless killing brought upon us by an enemy who wants to exploit the Afghan people through fear and violence."