The governor of Nuristan, which was the scene of heavy battles last week between the Taliban and Afghan security forces, said the police and civilians were targeted Wednesday after they were mistaken for militants.
"The policemen were killed due to friendly fire," Jamaluddin Badr said, adding the air strike in the troubled district of Do Ab targeted a location that the officers "had just" taken from the insurgents during fighting.
"Civilians were killed because the Taliban... (who) ran out of ammunition fled into the civilians'' houses and then the civilians were mistaken with the Taliban and fired upon," the governor said.
The NATO-led International Security Assistance Force said it was investigating the allegations.
"ISAF has sent a fact-finding team to investigate the allegations about civilian and police casualties in Nuristan," ISAF spokesman Major Tim James said.
"Our initial reporting does not indicate civilian casualties in that air strike," he added.
Civilian casualties in the US-led war against Al-Qaeda-linked Taliban insurgents is a sensitive issue and one of the main causes of a widening drift between President Hamid Karzai and his US backers.
Karzai on Saturday ordered Defence Minister Abdul Rahim Wardak to take over control of night raids from the NATO forces.