The motorcycle was parked at the market in the Dihrawud district of Uruzgan province, said provincial council director Amanullah Otaq. He said eight people were killed and dozens wounded.
Uruzgan provincial spokesman Hamid Milad Mudasir confirmed the attack, but said he could not confirm how many people were killed because family members had taken many of the bodies away immediately after the attack.
The blast was the latest in a series of attacks in the turbulent south, where the Taliban are pushing back against a concerted campaign from US and NATO troops to quell the insurgency.
In neighbouring Kandahar province, a gunman killed a woman who works for the Afghan government as she was on her way to work in Kandahar city. The assailant shot Rabia Sadat twice as she was getting into a car outside her home this morning, said her father, Sayed Hussein Sadat.
Sadat worked for the province's work and social affairs department, said Zalmai Ayubi, a spokesman for Kandahar's provincial government.
Ayubi said it was not clear why Sadat was killed, and her father said he did not know of any threats against his daughter. Insurgents regularly target government workers or women who attend school or work in offices.
Also Tuesday, NATO said that one of its cargo planes collided with a surveillance drone in eastern Afghanistan a day earlier. The C-130 plane made an emergency landing at a nearby base but was only lightly damaged and no one aboard was injured, said Italian army Capt. Pietro D'Angelo, a spokesman for NATO forces in Afghanistan.