Seven civilians, including six children, have been killed in a Nato air strike in southern Afghanistan, local officials say.

District Governor Niaz Mohammad Sarhadi told the BBC the civilians died late on Wednesday in the Zheray district of Kandahar province.

He said the strike had been launched in a remote area after Taliban insurgents were seen planting roadside bombs.

Afghan President Hamid Karzai strongly condemned the bombing.

The issue of civilian casualties at the hands of Nato forces is highly sensitive in Afghanistan.

The Nato-led International Security Assistance Force (Isaf) said it has begun a high level inquiry and would also undertake a join assessment with Afghan authorities.

No Afghan forces were involved in the incident.

A statement from Isaf said the "unfortunate incident" had occurred when coalition forces identified, and responded to, offensive actions by insurgents.

"Protecting the Afghan civilian population is central to our mission here in Afghanistan and we will investigate this situation fully to determine exactly what took place and whether any further actions need to be taken," said Gen John R Allen, Isaf commander.

"As was President Karzai, I too was saddened by this event. Our thoughts and prayers go out to those families who have been affected by this incident," Gen Allen said.

Afghan civilian deaths Jan-Jun 2011 Total number of deaths - 1,462

80% of deaths due to insurgent activity

14% of deaths due to Afghan or international security forces

Nato air strikes killed 79 civilians

Nato night raids caused 2% of civilian deaths In graphics

Zheray is a volatile district which lies on the strategic highway linking Kandahar in the south-east with Herat in the west.

Afghan and international forces have carried out a number of operations in the district in the last couple of years.

The country saw 1,462 civilian deaths in January to June this year - a 15% increase on the same period last year.

Meanwhile, officials in the western province of Farah say militants killed at least 10 Afghan employees of a private security company on Thursday.

A spokesman for the provincial governor told the BBC the convoy of vehicles was attacked in Bakwah district.

Many of the vehicles, thought to be carrying supplies for Nato forces, were set on fire.