Ahmad Zia Abdulzai, spokesman for the provincial governor, said the attack was carried out by a suicide bomber in the city's Bati Kot district.
One American soldier was wounded in the blast, Peavy said. Of the 57 civilians wounded, 40 were hospitalized and 17 were treated and released, said Ajmal Pardes, a health official for Nangarhar province.
Taliban militants regularly use suicide attackers and car bombs in their assaults against U.S., Afghan and other foreign troops in the country.
On Wednesday, a suicide bomber driving a tanker truck hauling oil detonated his explosives outside an Afghan government office during a provincial council meeting in the southern city of Kandahar, killing six people and wounded 42, officials said.
The blast in the Taliban's former stronghold came as the provincial council was hearing constituent complaints. Two members of the provincial council were wounded in the attack, said Kandahar's Gov. Rahmatullah Raufi.
The explosion ripped through the council office, flattened five nearby homes and damaged the offices of the country's intelligence service. It left a crater some 15 feet into the ground.
Raufi blamed Taliban militants for the attack.
Hours earlier, two men on a motorcycle threw acid on eight Afghan girls walking to school in Kandahar, and three of the girls were hospitalized with serious burns, said Dr. Sharifa Siddiqi. Three others were treated and released and two girls were not injured.
Girls were banned from schools under the Taliban's hard-line Islamist regime, which ruled Afghanistan from 1996 to 2001. Women also were not allowed to leave the house without a male family member escorting them.
Afghanistan's government condemned the attack, calling it un-Islamic and perpetrated by the "country's enemies," a usual reference for Taliban militants.
No one immediately claimed responsibility, and Taliban spokesman Qari Yousef Ahmadi denied that the insurgents were involved.