Seven people were burnt to death in southern Afghanistan on Friday when a fuel tanker supplying a NATO base crashed and set their vehicle on fire, officials said.

The security chief of Panjwayi district and the Kandahar police chief said there was no insurgent activity at the time, and residents later pulled back from claims that the Taliban had attacked with rocket-propelled grenades.

A US soldier serving in NATO's US-led International Security Assistance Force (ISAF) was charged this month with 17 counts of murder following a killing spree in the same district of Kandahar province on March 11.

Sardar Mohammad, Panjwayi's security chief, told AFP: "A fuel tanker supplying fuel for ISAF overturned and caught fire, and simultaneously a civilian minivan was passing nearby also set ablaze."

Seven people were killed and three others who were injured were taken to hospital, he said.

Abdul Hakim, who lives opposite the crash site, told AFP he heard a loud bang when the tanker overturned, and a passing vehicle was set on fire by the blaze.

Kandahar police chief Abdul Raziq confirmed the death toll, telling AFP: "This fuel tanker was coming from the city of Kandahar to Panjwayi district at high speed.

"On its way this tanker overturned and caught fire," he said. "A civilian minivan was passing on the way and the vehicle was also set ablaze."